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Our  Public  Debt 


An  historical  sketch  with  a 
Description  of  United  States  Securities 

By 

Harvey  E.  Fisk 


New  York 
Bankers  Trust  Company 


1919 

35ZQ1 


Copyright  1919  by 

Bankers  Trust  Company 

New  York  City 


%\0\ 
Ft 

Preface 

NOTWITHSTANDING  the  great  increase  in  the  public 
debt  and  the  wide  distribution  of  United  States  bonds 
among  the  people  during  the  past  two  years  of  war,  there 
has  not  been  available  in  concrete  form  a  complete  description 
of  the  bonds  or  a  history  of  the  debt. 

Believing  that  such  a  description  and  history  would  be 
valued,  not  only  by  our  own  clients,  but  by  investors  gen- 
erally, we  arranged  for  the  present  publication — the  first  in  a 
series  of  pamphlets  which  we  purpose  publishing  on  banking 
and  investment  topics. 

Our  Public  Debt  has  been  written  by  Mr.  Harvey  E.  Fisk, 
of  our  Bond  Department.  Mr.  Fisk's  familiarity  with  the 
subject  derived  from  an  experience  of  years  in  dealing  in 
United  States  bonds  qualifies  him  to  write  upon  this  subject 
in  an  authoritative  manner.  Mr.  Fisk  has  gone  for  his  facts 
to  official  and  other  original  sources,  such  as  the  Finance 
Reports  of  the  United  States,  the  American  State  Papers, 
and  circulars  and  other  papers  published  at  the  time  the 
various  loans  were  issued.  The  technical  descriptions  of 
United  States  bonds  and  certificates  and  instructions  in  regard 
to  transactions  with  the  Treasury  Department  are  based 
upon  the  latest  official  data  and  regulations. 

The  Bankers  Trust  Company's  Tables  of  Liberty  Bond 
Values,  typical  pages  from  which  are  printed  herewith,  have 
been  prepared  for  us  by  Mr.  John  S.  Thompson,  Assistant 


Actuary  of  The  Mutual  Life  Insurance  Company,  and  inde- 
pendently checked  by  Professor  L.  P.  Eisenhart,  of  the  Math- 
ematics Department  of  Princeton  University.  We  believe 
that  these  tables  will  be  generally  appreciated  by  all  dealers 
and  large  investors  in  the  Liberty  bonds.  The  complete 
book  of  tables  may  be  had  by  those  interested.  The  excerpts 
published  herewith  will  be  found  to  serve  the  purposes  of 
most  individual  investors. 

To  complete  the  series  we  have  also  published  in  uniform 
style  an  annotated  edition  of  the  laws  under  which  the 
Liberty  bonds  and  certificates  have  been  issued.  Copies  may 
be  had  by  any  one  interested  upon  application. 

Bankers  Trust  Company 


New  York,  April  15,  1919 


Contents 

Part  I 
Our  Public  Debt 


Funding  the  Revolutionary  Debt  (i 789-1 800) 

Commercial  Warfare  (1801-1811) 

Strained  Relations  with  France 
The  Purchase  of  Louisiana 


The  War  of  1812 

(1812-1815) 

14 

The  Use  of  Treasury  Notes 

Surplus  Financing 

(1816-1836) 

20 

Financing  Deficits 

(1837-1860) 

26 

The  Mexican  War 

The  Independent  Treasury 

Civil  War  Financing 

(1861-1866) 

34 

Liquidating  the  War  Debt 

(1867-1893) 

40 

Specie  Payments  Resumed 

Fighting  "Gresham's  Law" 

(1878-1897) 

46 

The  Silver  Craze 

The  Spanish  War 

(1898-1916) 

S3 

The  Two  per-cent  Consols 

The  Panama  Canal 

The  Great  War 

(1917-1919) 

56 

Part  II 
Descriptive 

PAGE 

Some  Comparative  Data  62 

The  Debt  Today  and  After  Other  Wars 
The  Debt  and  the  National  Wealth 
The  Interest  Charge  and  the  National  Income 
The  Debt  and  Debts  of  Other  Nations 

General  Information  69 

The  Old  Debt  71 

Circulation  Bonds 
Conversion  Bonds 
Xon-interest-bearing  Debt 
Postal-Savings  Bonds 

The  War  Debt  75 

Certificates  of  Indebtedness 
Liberty  Bonds 
Victory  Liberty  Notes 
War  Savings  Certificates 

The  Banks  and  United  States  Bonds  83 

Circulation 
Public  Deposits 
Loan? 

Taxation  87 

Old  Debt 
War  Debt 

Coupon  Bonds  92 


Registered  Bonds  94 

Assignments 
Interest  Payments 

Lost,  Destroyed  and  Defaced  Bonds  99 

TABLES 

Public  Debt  Statement  100-101 

Amounts  Outstanding 
Interest  Rates  and  Payment  Dates 
Redemption  and  Maturity  Dates 

Transfer  Books — Open  and  Close  102-103 

Denominations 
Conversion  Privileges 

Trend  of  the  Market  105 

Before  and  After  Former  Wars  and  Other  Special  Crises 

Part  III 
Liberty  Bond  Values  Tables  iox 

General  Index 


Our  Public  Debt 

Chapter  T 
Funding  uic  i^i  oiucionary  Debt 

THE  public  debt  of  the  United  States  had  its  origin  in  the 
indebtedness  incurred  in  the  prosecution  of  the  Revolu- 
tionary War.  When  in  1789  Alexander  Hamilton  became  the 
first  Secretary  of  the  Treasury  of  the  United  States,  he  found 
that  the  new  government  had  inherited  from  the  Confedera- 
tion an  indebtedness  of  about  eighty  million  dollars.  This 
was  divided  into  three  parts,  namely,  the  indebtedness  held 
abroad,  the  domestic  debt  of  the  Confederation  and  the  debts 
of  the  individual  States,  which  had  been  incurred  for  the 
common  benefit.  These  debts  included  a  large  amount  of 
accrued  interest,  payment  of  which,  on  account  of  the  com- 
plete disorganization  of  the  finances  of  the  States  and  of  the 
Confederation,  had  fallen  into  arrears  for  several  years. 

In  his  great  report  on  the  public  credit,  Hamilton  recom- 
mended that  the  debt  due  abroad  should  be  immediately  put 
on  an  active  basis  by  the  payment  of  the  principal  and  interest 
which  was  in  arrears  and  the  making  of  arrangements  by 
which  the  remainder  of  the  debt  would  be  liquidated  at  an 
early  date.  There  was  no  other  opinion  held  in  regard  to  the 
treatment  of  the  foreign  debt. 

There  was,  however,  a  wide  difference  of  opinion  as  to 
what  should  be  done  about  the  domestic  debt  of  the  Con- 
federation because  of  the  fact  that  the  market  value  of  the 
different  securities  which  had  been  issued  was  so  low  that  it 


BANKERS  TRUST  COMPANY' 


was  felt  to  be  unfair  to  pay  those  who  had  acquired  their 
stock  b}'  purchase  from  original  owners  the  par  value  of  their 
holdings.  One  suggestion  made  was  that  such  holders  should 
be  paid  the  current  market  value  and  that  the  difference 
between  that  price  and  par  should  be  paid  to  those  from 
whom  they  had  acquired  their  holdings.  Hamilton  argued, 
however,  that  as  a  practical  matter  it  would  be  impossible 
to  follow  this  course  and  that  so  far  as  the  Government  was 
concerned  it  was  obligated  to  pay  the  indebtedness  according 
to  the  terms  of  the  obligation,  whether  in  the  possession  of  the 
original  holder  or  of  his  assigns,  and  that  this  was  the  only 
fair  course  to  follow,  and  his  views  finally  prevailed. 

In  regard  to  the  debts  of  the  several  States  there  was  still 
hotter  controversy.  It  so  happened  that  the  Southern  States 
were  not  heavily  involved  in  debt.  They  were  opposed  to 
the  new  government  being  loaded  with  the  debts  of  the 
Northern  States,  and  were  very  insistent  that  this  course 
should  not  be  followed.  Hamilton  took  the  position  that 
in  any  event  these  debts  would  have  to  be  paid  and  that 
it  was  much  better  to  include  all  the  indebtedness  and  to 
have  one  borrower  in  the  market  than  it  would  be  to  have 
fourteen  borrowers,  namely  the  Federal  Government  and  each 
of  the  States.  However,  in  addition  to  this  reason, 
Hamilton  had  a  better  reason  for  wishing  to  have  the  debts 
of  the  States  assumed  by  the  Federal  Government.  The 
ties  which  bound  the  several  States  together  were  still 
very  weak.  There  was  really  no  national  sentiment. 
There  was  thought  to  be  nothing  treasonable  in  talking 
about  the  possibility  of  the  newly-made  union  not  being 
found  to  be  practicable  and  some  other  alignment  of  the 
States  possibly  beins;  made.  Hamilton  felt  that  if  the 
people  of  means  had  their  money  invested  in  the  national 


FUNDING  THE  REVOLUTIONARY  DEBT        [  3 

securities  this  would  tend  to  create  a  national  sentiment  and 
would  be  one  excellent  method  of  cementing  the  union.  At 
that  time  he  and  Jefferson  were  still  on  good  terms  and 
Jefferson  was  willing  to  help  him  carry  through  his  debt- 
paying  programme.  Jefferson,  therefore,  gave  a  dinner  at 
which  the  representatives  of  the  different  States  were  present 
and  at  that  dinner  terms  were  arranged  whereby,  in  con- 
sideration of  withdrawing  their  opposition  to  the  plan  of  the 
assumption  of  the  State  debts,  the  Southern  States  were 
guaranteed  that  the  new  national  capital  should  be  located 
within  their  borders.  Hence  it  came  about  that  the  capital 
of  the  United  States  is  now  located  on  the  Potomac  and  not 
elsewhere. 

Hamilton  did  not  think  that  the  nation  was  in  a  position 
to  assume  the  full  six  per  cent,  interest  charge  upon  the 
domestic  debt  and  the  debts  of  the  States.  He  therefore  pro- 
posed that  for  ten  years  the  interest  be  adjusted  to  a  four  per 
cent,  basis  by  funding  these  debts  into  new  obligations.  His 
recommendations  were  adopted  by  Congress  in  an  Act  ap- 
proved August  4,  1790.  This  Act  provided  that  for  the  do- 
mestic debt  new  stock  should  be  given,  two-thirds  of  which 
should  bear  six  per  cent,  interest  from  date  and  one-third  bear 
six  per  cent,  interest  from  the  year  1800.  For  the  unpaid 
interest  new  obligations  were  given  bearing  interest  at  the 
rate  of  three  per  cent,  per  annum.  The  debts  of  the  States 
were  funded  so  that  four-ninths  should  bear  interest  at  the 
rate  of  six  per  cent,  from  January  1,  1792,  and  two-ninths 
from  the  year  1800,  while  three-ninths  bore  interest  at  the 
rate  of  three  per  cent,  from  1792.  Congress  authorized  a  new 
issue  of  bonds  for  twelve  million  dollars,  the  proceeds  to  be 
used  in  paying  the  accrued  interest  on  the  foreign  debt  and  in 
paying  off  that  portion  of  the  principal  which  was  past  due, 


4]  BANKERS  TRUST  COMPANY 

or  which  the  Government  had  the  right  to  anticipate;  to  pro- 
vide a  fund  for  taking  care  of  the  first  year's  interest  on  the 
domestic  debt  and  to  provide  a  fund  for  buying  up  in  the  market 
public  debt  purchasable  below  par.  This  money  was  arranged 
for  in  Holland. 

In  his  second  report  on  the  public  credit  made  in  January 
1795,  Hamilton  stated  that  the  public  debt  at  that  date, 
exclusive  of  loans  which  were  temporary  anticipations  of  rev- 
enue, amounted  to  $77,496,468.  He  urged  that  provision 
should  be  made  for  the  liquidation  of  the  debt  and  that 
favorable  action  should  be  taken  in  regard  to  the  recommen- 
dation of  President  Washington  for  "the  adoption  of  a  de- 
finitive plan  for  the  redemption  of  the  public  debt  and  to  the 
consummation  of  whatsoever  may  remain  unfinished  of  our 
system  of  public  credit  in  order  to  place  that  credit,  as  far  as 
may  be  practicable,  on  grounds  which  cannot  be  disturbed, 
and  to  prevent  that  progressive  accumulation  of  debt  which 
must  ultimately  endanger  all  government."  He  brought  for- 
ward a  plan  for  a  sinking  fund  which  was  quite  complicated, 
but  through  the  operation  of  which,  with  some  modification 
in  procedure  made  during  Gallatin's  administration  of  the 
Treasury,  the  debt  was  satisfactorily  liquidated  within  a 
comparatively  short  period  of  years.  In  his  Report  on  Man- 
ufactures submitted  to  Congress  in  December,  1791  Hamilton 
unquestionably  struck  a  keynote  which  has  been  constantly 
lived  up  to  by  subsequent  generations  and  which  undoubtedly 
will  always  be  the  sentiment  of  the  American  people,  namely, 
that  "as  the  vicissitudes  of  nations  beget  a  perpetual  tendency 
to  the  accumulation  of  debt,  there  ought  to  be,  in  every  gov- 
ernment, a  perpetual,  anxious  and  unceasing  effort  to  reduce 
that  which  at  any  time  exists,  as  fast  as  shall  be  practicable, 
consistently  with  integrity  and  good  faith." 


FUNDING  THE  REVOLUTIONARY  DEBT        [  5 

It  may  be  interesting  to  note  in  passing  that  Hamilton  was 
strongly  opposed  to  the  policy  of  taxing  the  public  funds.  He 
argued  that  to  issue  taxable  securities  was  equivalent  to  put- 
ting the  Government  in  a  position  of  saying:  "I  want  a  sum 
of  money  for  a  national  purpose  which  all  the  citizens  ought 
to  contribute  proportionably;  but  it  will  be  more  convenient 
to  them,  and  to  me,  to  borrow  the  money  of  you.  If  you  will 
lend  it,  I  promise  you  faithfully  to  allow  you  a  certain  rate  of 
interest,  while  I  keep  the  money,  and  to  reimburse  the  prin- 
cipal within  a  determinate  period,  except  so  much  of  the  one 
and  the  other  as  I  may  think  fit  to  withhold,  in  the  shape  of 
a  tax."  He  asks,  "Is  such  a  construction  either  natural  or 
rational?  Does  it  not,  in  fact,  nullify  the  promise,  by  the 
reservation  of  a  right  not  to  perform  it?"  He  defines  public 
debt  as  "a  property  subsisting  in  the  faith  of  the  Government. 
Its  essence  is  promise.  Its  definite  value  depends  upon  the 
reliance  that  the  promise  will  be  definitely  fulfilled."  Then 
he  says: "Can  the  Government  rightly  tax  its  promise?  Can 
it  put  faith  under  contribution  ?  Where  or  what  is  the  value 
of  the  debt  if  such  a  right  exist?" 

Another  matter  of  importance  which  Hamilton  discussed 
in  this  report  was  that  of  "the  right  of  a  government  to  se- 
quester or  confiscate  property,  in  its  funds,  in  time  of  war." 
He  argues  strongly  that  it  is  against  public  policy  for  a 
government  to  attempt  to  exercise  such  a  right. 

Summing  up,  Hamilton  says:  "Credit  is  an  entire  thing; 
every  part  of  it  has  the  nicest  sympathy  with  every  other 
part;  wound  one  limb  and  the  whole  tree  shrinks  and  decays. 
The  security  of  each  creditor  is  inseparable  from  the  security 
of  all  creditors.  The  boundary  between  foreigner  and  citizen 
would  not  be  deemed  a  sufficient  barrier  against  extending  the 
precedent  of  an  invasion  of  the  rights  of  the  former  to  the 


6  J  BANKERS  TRUST  COMPANY 

latter."  Therefore,  in  conclusion,  he  recommends  "that  there 
be  an  express  renunciation,  by  law,  of  all  pretension  of  right 
to  tax  the  public  funds,  or  to  sequester,  at  any  time,  or  on 
any  pretext,  the  property  which  foreign  citizens  may  hold 
therein." 

The  provision  made  by  Hamilton  for  buying  up  debt  in  the 
market  was  followed  by  excellent  results,  so  that  public  funds 
which  had  fallen  to  extremely  low  prices  both  at  home  and 
abroad  rose  steadily  in  market  value  to  the  great  advantage 
both  of  the  Government  and  of  the  bondholders.  One  un- 
fortunate phase  of  this  improvement  in  the  public  credit  was 
the  speculation  in  the  public  funds  by  which  it  was  accom- 
panied. This  speculation  led  to  wild  speculations  in  other 
securities  and  in  lands  and  in  March,  1792,  the  speculative 
excitement  came  to  a  head  in  the  first  financial  crisis  expe- 
rienced in  the  United  States.  However,  this  crisis  passed 
quickly  and  by  autumn  general  business  conditions  through- 
out the  States  were  on  a  sound  basis,  thus  verifying  Hamil- 
ton's prediction  that  if  the  finances  of  the  Government  were 
put  on  a  sound  basis,  the  business  situation  would  become 
good  and  the  people  prosperous.  Hamilton's  financial  meas- 
ures, in  addition  to  the  funding  of  the  debt,  included  the 
creation  of  the  first  Bank  of  the  United  States,  the  founding 
of  the  mint,  providing  for  a  convenient  system  of  coinage  and 
the  adoption  of  a  revenue  system  which  would  afford  the 
Federal  Government  an  income  with  which  to  cover  the  pay- 
ment of  its  moderate  expenses  and  the  regular  payment  of 
the  interest  upon  the  debt  as  well  as  make  provision  for  its 
steady  reduction.  It  may  be  of  interest  to  note  in  passing  that 
the  first  budget  of  the  Federal  Governmentwas  for  $2,839,000, 
of  which  less  than  $600,000  was  for  current  expenses,  all  the 
rest  being  provided  for  use  in  connection  with  the  debt. 


FUNDING  THE  REVOLUTIONARY  DEBT        [  7 

In  addition  to  the  refunding  operations  referred  to  above, 
it  was  found  necessary  during  Hamilton's  administration  to 
make  some  small  additions  to  the  debt  principally  for  the 
purpose  of  making  good  revenue  deficits.  About  seven  hun- 
dred thousand  dollars  in  bonds  were  issued  for  the  purpose  of 
acquiring  six  frigates  with  which  to  protect  our  commerce  in 
the  Mediterranean.  During  this  period  the  Government 
leaned  quite  heavily  upon  the  Bank  of  the  United  States. 
Loans  from  the  bank  at  one  time  aggregated  as  much  as  six 
million  dollars.  In  1798  a  bill  was  passed  authorizing  the 
President  to  borrow  five  million  dollars  to  be  applied  toward 
defraying  any  expenses  which  might  become  necessary  on 
account  of  the  strained  relations  then  existing  between  the 
United  States  and  France.  This  loan  bearing  eight  per  cent, 
interest  was  placed  at  par,  in  1799.  The  following  year  about 
one  million  and  a  half  dollars  additional  bonds  were  placed 
also  bearing  eight  per  cent,  interest,  but  for  these  bonds  the 
Government  obtained  a  premium  of  5^  per  cent. 


Chapter  II 

Commercial  Warfare 
The  Louisiana  Purchase 

WITH  the  inauguration  of  Thomas  Jefferson  in  1801  the 
twelve  years  of  Federalist  government  under  the 
administrations  of  Washington  and  John  Adams  came  to  an 
end.  During  all  this  time  Hamilton  as  Secretary  of  the 
Treasury  or  as  the  directive  force  back  of  Wolcott  and  Dexter, 
his  successors  in  that  office,  had  ably  guided  the  financial 
interests  of  the  infant  nation. 

The  financier  of  the  Jefferson  administration  was  Albert 
Gallatin,  of  Swiss  extraction  and  early  training.  He  did  not 
have  the  great  constructive  ability  of  Hamilton  but  was  well 
fitted  for  his  office,  having  for  many  years  been  a  close  student 
of  financial  matters,  especially  of  our  own  national  finances. 
To  him  we  are  indebted  for  the  installation  of  many  of  the 
methods  for  the  orderly  administration  of  the  affairs  of  the 
Treasury  Department  which  have  survived  to  this  day.  The 
publication  of  regular  annual  reports  on  the  condition  of  the 
national  finances  was  inaugurated  by  Gallatin  in  1801.  Galla- 
tin was  not  as  successful  as  a  financier  as  he  was  as  a  financial 
administrator.  This  fact  will  become  more  in  evidence  when 
we  consider  the  financial  methods  which  he  devised  for  the 
conduct  of  the  War  of  1812. 

When  Gallatin  assumed  office  he  found  that  the  national 
debt  was  slightly  less  than  $80,000,000.  This  was  in  round 
figures  an  increase  of  about  three  million  dollars  for  the 
81 


COMMERCIAL  WARFARE  [  9 

twelve  years  of  the  previous  administration.  When  the  ac- 
counts of  the  Confederation  had  all  been  adjusted  the  debt 
actually  assumed  by  the  new  government  was  found  to  aggre- 
gate $76,781,953.  During  the  twelve  years  $7,488,354  of  the 
old  debt  had  been  liquidated,  but  $10,63 3, 400  of  new  debt  had 
been  incurred,  a  net  increase  of  $3,145,046. 

The  Federalists  had  coped  with  the  Indian  wars,  with  the 
so-called  whiskey  insurrections  in  the  State  of  Pennsylvania, 
had  paid  tribute  to  the  Barbary  pirates  and  had  spent  large 
sums  of  money  in  building  lighthouses,  repairing  fortifications 
and  in  founding  the  city  of  Washington.  In  addition  a 
beginning  had  been  made  in  the  creation  of  a  navy;  "more 
than  forty  sail  of  ship  and  armed  vessels,"  says  a  Congres- 
sional report,  had  been  built  or  purchased.  Some  two  million 
of  dollars  had  been  invested  in  the  stock  of  the  Bank  of  the 
United  States. 

Except  for  a  brief  period  in  the  early  years  of  Jefferson's 
administration,  from  the  outbreak  of  the  war  between  Great 
Britain  and  France  in  1793  down  to  the  close  of  the  War  of 
1812  in  1814,  we  were  constantly  involved  in  controversies 
with  first  one  and  then  the  other  of  these  nations.  These  con- 
troversies frequently  threatened  to  develop  in  military  form. 
In  the  light  of  history  we  can  now  see  that  England  was 
fighting  for  the  freedom  of  the  world  against  the  domination 
of  a  personality  no  less  dangerous  to  the  common  weal  than 
that  other  putative  demi-god  who  is  now  in  exile  in  Holland. 
All  this  was  not  evident  to  our  forefathers  and  the  domineer- 
ing and  tactless  methods  of  our  British  cousins  from  whom  we 
had  only  recently  wrested  our  independence  did  not  help 
matters.  On  the  other  hand  our  forefathers  were  still  deeply 
conscious  of  the  debt  which  they  owed  to  France  for  her  help 
in  their  struggle  for  independence. 


IOJ  BANKERS  TRUST  COMPANY 

In  the  wars  between  Great  Britain  and  France  the  suprem- 
acy of  the  seas  fell  to  Great  Britain  and  she  went  to  great 
lengths  to  maintain  this  supremacy. 

Jay's  treaty  of  1 794-1 795  had  averted  war  with  England, 
settling  a  number  of  questions  which  had  long  been  causes  of 
friction. 

Our  first  difficulties  developed  with  our  recent  ally, — France. 
Almost  the  first  act  of  Adams'  administration  had  been  to 
take  steps  to  bring  the  French  to  terms.  Although  there  had 
been  no  declaration  of  war  yet  war  was  actually  being  carried 
on  upon  the  ocean.  American  merchant  vessels  were  seized 
and  carried  into  French  ports  and  condemned  on  the  slightest 
pretext. 

From  this  time  dates  the  organization  of  the  Navy  Depart- 
ment under  the  able  leadership  of  Benjamin  Stoddert  as  the  first 
secretary.  Within  a  short  time  a  number  of  well-equipped 
ships  were  in  active  service.  They  drove  ofF  the  French 
privateers  and  when  peace  was  restored  in  1800  had  a  record 
of  eighty-four  prizes.  Meanwhile  Napoleon  had  come  upon 
the  scene  as  the  new  master  of  France  and  with  him  Adams 
concluded  a  treaty  of  peace  which  safeguarded  the  rights 
of  neutrals  by  restraining  the  right  of  search  and  conceding 
the  principle  that  free  ships  make  free  goods. 

When  Jefferson  took  up  the  reins  of  office  he  found  a  full 
treasury  and  a  prosperous  country.  The  previous  administra- 
tion had  been  deriving  revenue  from  customs  duties  and  from 
very  unpopular  excise  taxes,  as  well  as  from  sales  of  lands. 
One  of  Jefferson's  first  acts  was  to  bring  about  a  repeal  of  the 
excise  taxes.  The  new  party  had  come  into  power  committed 
to  the  payment  of  the  public  debt,  which  they  claimed  that 
Hamilton  wished  to  maintain  because  of  his  "monarchical" 
tendencies. 


COMMERCIAL  WARFARE  [il 

The  peace  with  France  having  removed  for  the  time  being 
the  necessity  for  extraordinary  expenses  it  was  possible  for 
the  new  administration  for  several  years  to  effect  large 
annual  debt  reductions,  with  the  result  that  Gallatin  could 
report  to  Congress  in  1807  that  the  "total  of  public  debt 
reimbursed  from  the  1st  of  April,  1801,  to  the  1st  of  October, 
1807,  amounted  to  about  #25,880,000." 

The  continuance  of  the  depredations  of  the  Barbary  powers 
and  the  insolent  attack  of  one  of  them,  the  Pasha  of  Tripoli, 
upon  the  American  Consul  in  the  Spring  of  1801,  led  to  a 
naval  war  which  lasted  some  four  years  but  which  finally 
resulted  in  disposing  of  this  menace  to  our  Mediterranean 
commerce.  The  expense  of  this  little  affair  was  met  by  the 
imposition  of  a  special  tax  upon  imports,  the  income  from 
which  was  known  as  the  "Mediterranean  Fund." 

In  May,  1801,  Jefferson  was  much  disturbed  by  the  receipt 
of  information  that  Spain  might  re-cede  Louisiana  and  the 
Floridas  to  France.  Our  relations  with  Spain  had  been  quite 
satisfactory,  as  she  had  been  willing  to  allow  our  vessels  from 
the  Mississippi  and  its  tributaries  the  right  to  deposit  goods 
at  New  Orleans  free  from  all  government  exactions  while 
awaiting  trans-shipment  to  sea-going  vessels. 

As  a  matter  of  fact  on  October  1,  1800,  Spain  had  agreed  to 
recede  the  Province  of  Louisiana  to  France.  The  formal  order 
to  carry  out  this  agreement  was  signed  on  October  15,  1802 
and  in  the  following  November  the  Spanish  intendant  of 
Louisiana  issued  a  proclamation  withdrawing  the  right  of 
deposit,  probably  at  the  instigation  of  France,  although  no 
actual  transfer  of  sovereignty  had  as  yet  taken  place. 

The  western  people  were  outraged  and  demanded  immedi- 
ate war.  Jefferson  sent  a  commission  to  France  to  take  steps 
looking  to  "enlarging  and  more  effectually  securing  our  rights 


12]  BANKERS  TRUST  COMPANY 

and  interests  in  the  Mississippi  River  and  the  territories  east- 
ward thereof."  As  a  result  of  the  efforts  of  this  commission, 
aided  probably  by  Napoleon's  need  for  funds  to  carry  on  his 
ambitious  military  schemes,  an  opportunity  was  presented  to 
purchase  outright  the  French  title  for  what  it  was  worth.  As 
Channing  says,  "Here  was  an  opportunity  to  gain  money  by 
the  simple  process  of  selling  what  a  modern  stock  broker 
would  term  a  'call'  for  the  delivery  of  certain  goods,  which 
in  this  case  consisted  of  one  town  [New  Orleans]  and  an  in- 
definite amount  of  wilderness."  The  price  paid  was  $11,- 
250,000  and  the  assumption  of  certain  claims  of  American 
citizens  against  France  aggregating  #3,750,000.  To  carry  out 
this  agreement  $11,250,000  six  per  cent  bonds  were  issued 
and  handed  over  to  France  in  the  early  part  of  1804.  The 
cash  payment  was  made  from  the  treasury  surplus. 

Meanwhile  the  ambitions  of  Napoleon  were  daily  becoming 
greater  and  the  hostility  between  him  and  England  more 
bitter. 

From  1805  on  our  relations  with  both  England  and  France 
were  greatly  involved.  The  path  of  neutrality  was  a  most 
difficult  one  to  tread. 

It  is  hard  to  determine  whether  our  grievances  against 
France  or  against  England  were  the  greater.  Embargoes  and 
non-intercourse  acts  on  our  part;  blockades,  imprisonment  of 
seamen,  seizures  of  merchant  ships,  and  actual  attacks  upon 
our  war  ships  by  England;  blockades,  seizures  of  ships  and 
threats  to  treat  American  seamen  if  found  on  English  vessels 
as  pirates,  even  though  there  against  their  will,  on  the  part 
of  France,  brought  about  a  very  serious  three-cornered 
situation. 

Foreign  trade  was  disorganized  and  the  revenues  of  the 
Government  therefrom  reduced.     A  premium  was  put  upon 


COMMERCIAL  WARFARE  [  13 

evasions  of  the  embargoes  and  non-intercourse  acts  because 
of  the  large  profits  which  could  be  realized  from  successful 
voyages. 

In  turn  France  and  England  encouraged  or  combated 
this  trade  as  it  served  their  interests  to  do  so.  In  one  year 
it  is  estimated  that  the  French  seized  vessels  which  with  their 
cargoes  were  worth  at  least  $10,000,000,  and  all  told  she  is 
said  to  have  seized  after  1801,  558  vessels  against  seizures  of 
917  by  the  British.  However,  the  Administration  selected  Great 
Britain  as  the  greater  sinner  and  on  June  18, 1812,  declared  war 
against  her, — a  war  which  probably  might  have  been  averted 
if  the  Atlantic  cable  had  then  been  laid,  as  on  June  23d  the 
British  Cabinet  before  they  knew  of  our  declaration  of  war 
had  assumed  a  conciliatory  attitude  by  withdrawing  certain 
obnoxious  decrees. 


Chapter  III 
The  War  of  1 8 1  2 

ALTHOUGH  trouble  had  been  brewing  for  years  the 
advent  of  this  war  found  the  country  in  every  way  quite 
unprepared.  As  far  back  as  1807  Gallatin  had  discussed  in 
his  annual  report  the  proper  method  of  financing  war  if  it 
came  and  this  method  was  the  one  adopted.  His  theory  was 
that  the  war  expenses  should  be  financed  by  loans  and  the 
taxes  increased  only  enough  to  provide  for  the  interest  there- 
on. For  several  years  the  treasury  revenues  had  been  large, 
the  redemptions  of  debt  substantial  and  a  cash  balance  had 
accumulated  of  around  eight  million  dollars.  The  Adminis- 
tration was  evidently  apprehensive  as  to  how  tense  the  inter- 
national complications  might  become  in  the  early  future. 
Gallatin  realized  that  the  revenue  would  be  considerably  im- 
paired by  a  war.  He  also  realized  that  a  maritime  war  would 
immediately  affect  almost  every  individual  in  the  community 
because  not  only  commercial  profits  would  be  curtailed,  but 
principally  because  a  great  portion  of  the  agricultural  produce 
necessarily  required  a  foreign  market.  Continuing  his  argu- 
ment, he  said,  "the  reduced  price  of  the  principal  articles 
exported  from  the  United  States  will  operate  more  heavily 
than  any  contemplated  tax."  He  therefore  reached  the  con- 
clusion that  "the  losses  and  privations  caused  by  the  war 
should  not  be  aggravated  by  taxes  beyond  what  is  strictly 
necessary,"  namely  "to  provide  for  the  interest  of  war-loans." 
In  his  report  for  1808  Gallatin  refers  to  the  fact  that 
as  the  "decrees  of  France  can  be  enforced  only  in  her  own 


THE  WAR  OF  l8l2  [  15 


territory,  and  in  those  of  her  allies,"  they  cannot  materially 
affect  our  commerce.  He  then  adds  "but  Great  Britain, 
having  the  means  of  enforcing  her  orders  on  the  ocean,  the 
navigation  of  that  element  cannot  be  resumed  without  en- 
countering those  orders;  and  they  must  either  be  submitted 
to  or  resisted.  And  this,  however  done,  and  by  whatever 
name  called,  will  be  war."  He  then  restates  his  "belief  that 
loans  should  principally  be  relied  upon  in  case  of  war," 
and  says  flatly  "no  internal  taxes,  either  direct  or  indirect, 
are  therefore  contemplated,  even  in  the  case  of  hostilities 
carried  on  against  the  two  great  belligerent  powers." 

In  his  report  dated  November  22,  181 1,  Gallatin  reviews 
with  justifiable  pride  the  results  of  his  administration  of  the 
Treasury  in  the  handling  of  the  public  debt.  In  the  ten  years 
and  nine  months  which  would  have  elapsed  by  the  end  of  the 
year,  the  foreign  debt  of  $10,075,004  would  be  paid  in  full, 
as  well  as  $35,947,806  of  the  old  domestic  debt,  making  total 
payments  of  $46,022,810.  The  amount  of  old  debt  unre- 
deemed was  $33,904,189.  Adding  the  Louisiana  6%  stock,  a 
new  debt  of  $11,250,000,  the  whole  amount  of  the  public  debt 
on  the  1st  of  January,  181 2,  would  be  $45,154,189  as  against 
$79,926,999  on  April  I,  1801.  In  addition  there  had  been  paid 
$3,750,000  in  cash  called  for  by  the  Louisiana  purchase  and 
around  $3,000,000  in  cash  to  British  creditors  of  American 
debtors,  the  settlement  of  whose  claims  had  been  a  matter 
in  dispute  with  Great  Britain  ever  since  the  close  of  the 
Revolutionary  War. 

The  reduction  of  the  annual  interest  charge,  notwithstand- 
ing the  addition  of  $675,000  for  the  interest  on  the  Louisiana 
stock,  was  from  $4,180,463,  April  1,  1801,  to  $2,222,481 
January  1,  181 2.  Gallatin  points  out  that  this  result  was 
accomplished    without  the  aid   of  any  internal  taxes   and 


l6]  BANKERS  TRUST  COMPANY 

notwithstanding  the  great  diminution  of  commerce  during 
the  last  four  years  of  the  period.  He  argues  that  this 
demonstrated  ability  to  discharge  debt  rapidly  from  the 
income  of  customs  duties  justifies  in  the  event  of  war  a 
reliance  upon  borrowing  in  preference  to  "a  total  change 
in  the  system  of  taxation."  He  reaches  this  conclusion  be- 
cause of  his  observation  that  revenue  depending  almost  en- 
tirely on  commerce  is  in  time  of  war  hardly  competent  to 
support  the  expenses  of  a  peace  establishment,  yet,  in  time 
of  peace,  is  almost  sufficient  to  defray  the  expenses  of  a  war, 
and  thus  permits  of  the  accumulation  of  a  surplus  sufficient 
to  reimburse  without  any  extraordinary  exertions  a  debt  con- 
tracted during  five  or  six  years  of  war. 

This  obsession  on  Gallatin's  part  in  favor  of  an  exclusive 
loan  policy  was  shared  by  Congress,  which,  however,  went  one 
step  farther  and  declined  even  to  levy  taxes  with  which  to 
meet  the  interest  upon  the  increased  debt  or  to  offset  the 
shrinkage  in  customs  revenue  which  Gallatin  realized,  and 
Congress  should  have  realized,  would  inevitably  result  from 
a  war  with  the  greatest  maritime  power  of  the  world. 

Another  event  which  tended  still  further  to  aggravate  the 
situation  was  the  failure  of  Congress  to  recharter  the  Bank 
of  the  United  States,  so  that  the  Government  had  no  adequate 
banking  support  during  the  war.  Specie  payments  were  sus- 
pended by  most  of  the  banks  outside  of  New  England  in 
August,  1 8 14.  The  depreciation  in  the  values  of  bank  notes 
and  their  varying  values  in  different  sections  of  the  country 
added  greatly  to  the  difficulties  of  financing  the  war  and  to 
the  expense.  In  a  report  submitted  to  Congress  in  1830  when 
the  affairs  of  the  second  Bank  of  the  United  States  were 
under  discussion,  it  is  estimated  that  the  specie  value  of  the 
receipts  of  the  Treasury  during  the  period  of  the  War  of  181 2 


THE  WAR  OF  l8l2  [  17 

was  cut  in  half  because  of  this  depreciation  of  the  notes  of 
the  banks. 

The  expenses  of  the  Government  from  January  1,  181 2,  to 
September  30,  181 5,  are  stated  by  Dallas  in  his  very  able 
report  for  the  year  1815  to  have  been  $133,703,880.  Most  of 
these  disbursements  were  occasioned  by  the  war,  although  the 
old  debt  had  been  decreased  during  the  period  by  the  amount  of 
$5,899,638,  leaving  the  sum  of  $127,804,241  to  represent  the 
current  expenditures  of  the  period.  During  the  same  period 
the  new  debt  increased  $80,500,073 — equivalent  to  about 
62%  of  the  total  expenditures  for  the  period.  The  remaining 
38%  was  derived  from  revenue  for  although  Congress  did  not 
take  any  important  steps  towards  increasing  internal  taxes, 
until  the  special  session  held  September,  1814,  to  March,  1815, 
the  receipts  from  old  sources  exceeded  expectations.  This  was 
especially  true  of  the  year  18 15  when  there  was  a  great  in- 
crease in  customs  revenue  due  to  the  revival  of  commerce 
following  the  declaration  of  peace. 

The  eighty  odd  million  of  new  debt  was  about  eighty  per 
cent  in  the  form  of  funded  debt  and  the  remainder  was  chiefly 
in  the  form  of  Treasury  notes. 

The  unpopularity  of  the  war  in  the  New  England  States 
and  in  New  York  made  it  difficult  for  the  Treasury  to  float 
loans.  This  difficulty  was  added  to  by  the  indisposition  of 
Congress  in  the  early  years  of  the  war  to  lay  taxes  sufficient 
even  to  offset  the  shrinkage  in  the  customs  revenue.  A  6% 
loan  of  $11,000,000,  twelve  years  to  run,  was  offered  in 
1 81 2,  but  only  about  $8,000,000  taken.  To  raise  $16,000,000 
by  loan  in  1813,  it  was  necessary  to  sell  $18,109,377  6%  bonds 
at  88.  In  the  same  year  about  $8,500,000  bonds  were  sold 
at  88^.   In  i8i4the  Government  credit  was  so  poor  that  6% 


l8  ]  BANKERS  TRUST  COMPANY 

bonds  had  to  be  offered  as  low  as  80%  in  order  to  find  a 
purchaser,  at  which  price  about  $15,000,000  bonds  were  sold. 

Under  these  conditions  the  Treasury  Department  turned  in 
desperation  to  the  issuance  of  Treasury  notes.  The  first 
issues  of  these  notes  made  in  1812-1814  were  receivable  in 
payment  of  duties  and  taxes  and  for  public  lands.  They  were 
payable  within  a  year  and  bore  interest  at  the  rate  of  5f% 
per  annum.  In  1815  two  new  kinds  of  notes  were  authorized 
and  offered.  One  series  of  notes  bore  the  customary  5f% 
interest  but  was  made  exchangeable  for  6%  funded  stock,  as 
well  as  being  made  receivable  for  all  payments  due  to  the 
United  States,  but,  however  redeemed  or  surrendered,  these 
notes  were  liable  to  reissue  in  like  manner  as  originally  issued. 
The  notes  of  the  other  series,  known  as  "small  treasury 
notes,"  bore  no  interest  but  were  exchangeable  for  funded 
stock  bearing  7%  interest.  The  Treasury  notes  were  all  sold 
at  par.    A  small  amount  of  the  last  issue  brought  a  premium. 

Except  this  series,  of  which  notes  were  issued  in  various 
denominations,  even  as  low  as  three  dollars,  no  notes  were  is- 
sued of  smaller  denominations  than  one  hundred  dollars. 

The  gross  amount  of  Treasury  notes  issued  1812-1815,  in- 
clusive, not  including  re-issues,  was  $32,457,040;  the  amount 
outstanding  at  the  close  of  181 5,  deducting  $6,361,125  notes 
held  in  the  Treasury  cash,  was  $17,515,504.  Quite  large  is- 
sues were  made  during  the  year  1816  but  by  the  close  of  1817 
practically  the  entire  amount  of  notes  issued  had  been  retired. 

The  experiment  had  come  dangerously  near  to  developing 
into  a  legal  tender  issue.  As  a  matter  of  fact  the  notes  never 
circulated  to  any  important  extent,  as  the  interest-bearing 
feature  of  the  earlier  issues  and  the  conversion  features  made 
it  more  advantageous  to  hold  them  than  to  circulate  them. 


THE  WAR  OF  l8l2  [  IQ 


In  addition  to  bonds  and  Treasury  notes  there  were  several 
temporary  loans  arranged  during  the  course  of  the  war, 
including  one  for  $225,000  to  meet  the  expense  of  rebuilding 
the  White  House  and  the  Capitol  which  had  been  burned  by 
the  British  during  their  brief  occupancy  of  Washington. 

The  gross  debt  on  December  31,  1815,  was  $133,403,466. 
Deducting  from  this  amount  the  Treasury  notes  for  $6,361,- 
125  held  in  the  Treasury  cash,  we  find  that  the  amount  of 
debt  actually  outstanding  in  the  hands  of  the  public  was 
$127,042,341,  the  maximum  debt  from  the  founding  of  the 
government  until  the  Civil  War.  Included  in  this  amount 
was  the  sum  of  $3,084,252,  Mississippi  stock,  so  called  be- 
cause issued  to  indemnify  certain  claimants  of  public  lands 
in  the  Mississippi  Territory.  This  stock  did  not  bear  interest 
and  was  payable  out  of  moneys  to  be  realized  from  the  sale 
of  lands  in  the  Territory. 


Chapter  IV 
Surplus  Financing 

FOR  a  period  of  twenty-one  years,  1816  to  1836,  inclusive, 
the  annual  income  of  the  National  Treasury  usually  ex- 
ceeded expenses  and  in  most  years  the  excess  was  very  sub- 
stantial. The  revenues  were  derived  chiefly  from  customs 
duties,  as  the  internal  revenue  taxes  were  repealed  in  1818. 

There  was  not  a  year  during  the  period  in  which  there  was 
not  a  net  reduction  in  the  public  debt. 

In  order  to  remedy  the  impossible  banking  and  currency 
situation  referred  to  in  the  last  chapter,  resulting  from  the 
elimination  in  181 1  of  the  first  Bank  of  the  United  States,  it 
was  deemed  advisable  to  charter  another  national  bank.  Ac- 
cordingly the  second  Bank  of  the  United  States  was  chartered 
with  an  authorized  capital  of  $35,000,000  and  went  into  opera- 
tion on  January  I,  1817. 

The  United  States  subscribed  for  one-fifth  of  the  capital 
stock  and  the  bank  agreed  to  pay  $1,500,000  to  the  United 
States  in  consideration  of  the  exclusive  privileges  conferred 
on  the  corporation.  These  privileges  were  that  during  the  life 
of  the  bank  no  other  bank  should  be  established  by  authority 
of  the  United  States  except  in  the  District  of  Columbia.  The 
notes  of  the  bank,  payable  on  demand,  were  to  be  received 
in  all  payments  to  the  United  States  and  the  deposits  of  the 
moneys  of  the  United  States  were  to  be  made  in  the  bank 
or  in  its  branches,  unless  the  Secretary  of  the  Treasury 
should  at  any  time  otherwise  order  and  direct. 
20] 


SURPLUS   FINANCING  [  21 

To  provide  its  share  of  the  capital  the  United  States  issued 
to  the  bank  $7,000,000  5%  stock  which  the  bank  was  privi- 
leged to  sell.  The  balance  of  the  stock  of  the  bank  was 
offered  for  public  subscription  and  was  eagerly  taken  by 
31,334  persons,  all  but  three  thousand  of  whom  resided  in  the 
Middle  States. 

It  is  outside  of  our  present  purpose  to  pursue  the  history  of 
the  bank  or  to  attempt  to  discuss  the  many  bitter  contro- 
versies which  were  waged  over  its  affairs  until  President 
Jackson  summarily  severed  its  relations  with  the  Government 
in  1833. 

By  an  Act  approved  March  3,  1817,  Congress  appropriated 
the  sum  of  $10,000,000  a  year  for  the  debt  service,  any  sur- 
plus after  meeting  interest  charges  to  be  applied  to  the  re- 
duction of  the  principal. 

In  1817  no  less  an  amount  of  debt  was  paid  off  than 
$16,938,709,  making  a  net  reduction  in  two  years  time  of 
nearly  $24,000,000,  notwithstanding  the  issuance  of  the 
$7,000,000  in  exchange  for  the  stock  of  the  bank. 

How  this  was  made  possible  will  be  readily  understood 
when  it  is  remembered  that  following  the  declaration  of  peace 
and  the  return  of  unrestricted  foreign  trade,  the  revenues  of 
the  Government  had  jumped  from  only  $11,500,000  in  1814 
to  $49,893,000  in  1 81 5  and  $36,743,000  in  1816. 

The  next  year  was  also  a  prosperous  one  but,  in  1819,  a 
severe  industrial  and  commercial  crisis  occurred,  the  effects 
of  which  did  not  pass  away  for  several  years.  Therefore,  to 
meet  treasury  deficits  due  to  these  conditions,  it  became  neces- 
sary in  1820  and  also  in  1821  for  the  Government  to  again 
borrow: — about  $3,000,000  at  5%  and  6%  in  the  first  year 
and  about  $5,000,000  at  5%  in  the  second.    In  1824  the  Gov- 


22  J  BANKERS  TRUST  COMPANY 

ernment  borrowed  $5,000,000   at  4^%,  the  proceeds  being 
used  to  pay  Spain  for  the  Province  of  East  Florida. 

In  his  report  for  183 1,  Secretary  McLane,  looking  forward 
to  the  complete  extinguishment  of  the  debt  within  three  or 
four  years,  reviews  the  accomplishments  of  the  seventeen 
years  which  had  elapsed  since  the  close  of  the  War  of  181 2. 
Beside  a  net  reduction  in  the  debt  of  over  one  hundred  million 
dollars,  the  frontier  had  been  extensively  fortified,  naval  and 
maritime  resources  strengthened,  contributions  had  been 
made  for  internal  improvements,  the  valuable  territory  of 
Florida  purchased  and,  he  might  have  added,  $7,000,000  in- 
vested in  the  stock  of  the  bank. 

He  then  considers  what  is  to  be  done  when  the  debt  is  no 
longer  available  as  a  means  to  absorb  the  surplus  revenues. 
He  suggests  the  sale  of  the  stock  of  the  bank  and  the  applica- 
tion of  the  proceeds  to  the  payment  of  debt.  This  would  stop 
the  income  from  that  source.  Then  the  public  lands  might 
be  sold  to  the  States  within  which  they  were  located  and  the 
proceeds  pro  rated  among  all  the  States,  thus  this  source  of 
income  would  cease.  He  then  discusses  at  great  length  the 
revision  of  the  customs  duties  from  which  the  Government 
derived  the  bulk  of  its  income.  He  suggests  that  the  neces- 
sary changes  should  be  made  with  due  regard  to  the  interest 
of  all  the  people  and  of  all  lines  of  business  and  in  such  a  way 
as  not  to  injure  the  manufacturers,  but,  he  says,  the  latter 
should  be  satisfied  "with  a  moderate  and  gradual  protection, 
rather  than  by  extreme  measures  to  endanger  the  public 
tranquillity." 

Realizing  that  after  all  that  could  be  done  to  reduce 
revenues  they  would  still  be  much  in  excess  of  the  normal 
requirements  of  the  Government,  he  gives  a  long  list  of  objects 
to  which  the  anticipated  annual  surpluses  might  be  devoted. 


SURPLUS  FINANCING  [  23 

Summarized,  these  objects  were: — augmenting  naval  and 
military  resources;  placing  naval  officers  on  a  parity  with 
army  officers  as  to  pay  and  emoluments;  removing  obstruc- 
tions from  western  waters;  surveying  and  improving  the  coast 
and  harbors  for  the  benefit  of  commerce  and  navigation; 
increasing  the  pay  of  customs  officers  and  placing  the  diplo- 
matic service  on  a  better  basis  as  to  salaries  and  emoluments. 
Most  of  them,  perhaps  all,  were  very  worthy  objects. 

He  was  opposed  to  undertaking  any  scheme  of  internal 
improvements  or  of  financing  such  improvements  to  be  made 
by  the  States. 

Secretary  Taney  was  able  to  state  in  his  report  made  in 
December,  1834,  that  on  January  1,  1835,  the  entire  outstand- 
ing balance  of  debt,  would  be  paid  or  provided  for.  Thus,  he 
says,  "the  United  States  will  present  that  happy,  and  prob- 
ably in  modern  times,  unprecedented  spectacle  of  a  people 
substantially  free  from  the  smallest  portion  of  debt." 

Reference  has  already  been  made  to  the  periodical  discus- 
sions which  had  occurred  as  to  what  use  should  be  made  of 
the  Treasury  surpluses  after  the  debt  no  longer  existed  to  act 
as  a  regulator. 

The  troublesome  factor  in  the  situation  was  that  customs 
duties  were  laid  primarily  not  for  revenue  but  for  the  protec- 
tion of  the  infant  manufacturing  industries  of  the  nation. 

The  palpable  injustices  and  inequalities  of  the  tariff  laws 
had  led  to  a  dangerous  political  situation  which  was  corrected 
by  an  act  of  Congress  which  became  a  law  on  March  2,  1833. 
This  law  provided  for  a  gradual  reduction  in  duties  beginning 
January  1st,  1834,  and  ending  July  1st,  1842.  This  act  pro- 
vided that  after  the  latter  date  there  should  be  a  uniform 
duty  of  twenty  per  cent  upon  all  articles,  a  reduction  from 
an  average  rate  of  about  thirty-two  per  cent  collected  in  1833. 


24  J  BANKERS  TRUST  COMPANY 

The  result  was  a  sharp  falling  off  in  the  revenues  from  cus- 
toms in  1834,  nearly  50%.  However,  they  increased  again  in 
1835  and  in  1836  were  nearly  back  to  the  old  basis.  Mean- 
while 1835  and  1836  witnessed  an  unprecedented  increase  in 
the  revenues  from  the  sales  of  public  lands.  These  receipts 
which  prior  to  1833  had  averaged  considerably  less  than 
$3,000,000  a  year,  jumped  to  nearly  $4,000,000  in  that  year, 
to  nearly  $5,000,000  in  1834  and  then  shot  up  to  $14,757,000 
in  1835  and  to  $24,877,000  in  1836,  giving  the  Government  an 
income  of  $50,826,000  for  the  year,  an  amount  even  greater 
than  that  for  the  phenomenal  year  1816  and  from  thirty  per 
cent  to  sixty  per  cent  greater  than  for  any  intervening  year. 

The  causes  for  these  extraordinary  increases  in  income 
must  be  sought  in  the  unnatural  stimulation  given  to  specu- 
lation and  business  by  the  banking  and  currency  blunders 
of  the  Administration  in  connection  with  its  fight  against 
the  Bank  of  the  United  States. 

President  Jackson  was  opposed  to  the  making  of  internal 
improvements  by  the  Federal  Government,  believing  such  a 
course  to  be  both  unwise  and  unconstitutional.  A  plan  which 
had  been  proposed  for  dividing  the  surplus  among  the  States 
also  was  believed  to  run  counter  to  the  Constitution.  Finally 
the  decision  was  reached  to  deposit  with  the  States  "the 
money  which  shall  be  in  the  Treasury  of  the  United  States 
on  the  first  day  of  January,  1837,  reserving  the  sum  of  five 
million  dollars."  This  decision  was  embodied  in  an  act  of 
Congress  approved  June  23,  1836.  The  deposits  were  to  be 
made  in  four  quarterly  instalments,  beginning  January  1, 
1837.    They  were  not  to  bear  interest. 

It  may  be  added  in  concluding  this  chapter  on  the  surplus 
finances  of  the  Government  that  the  amount  of  surplus 
found  to  be  divisible,  after  deducting  the  working  capital  of 


SURPLUS  FINANCING  [  25 

#5,000,000,  was  #37,468,859,  calling  for  quarterly  distribu- 
tions of  #9,367,214.  Two  distributions  were  made  and  paid 
in  specie.  The  third  instalment  was  paid  in  depreciated  bank 
notes,  the  panic  of  1837  having  resulted  in  a  general  suspen- 
sion of  specie  payments  in  May  of  that  year.  The  fourth 
instalment  was  never  paid.  The  surplus  was  a  thing  of  the 
past. 


Chapter  V 
Financing  Deficits  and  The  Mexican  War 

THE  period  which  elapsed  between  1 83  7  and  1 861  was  one 
of  the  most  eventful  in  the  history  of  our  country. 
Politically,  the  old  controversy  between  those  who  respec- 
tively upheld  the  doctrines  of  state  rights  and  of  nationalism 
crystalized  more  and  more  about  the  question  of  slavery.  The 
tariff  and  the  management  of  the  public  finances  were 
causes  for  much  debate  and  bad  blood  in  and  out  of  Congress. 
The  great  influx  of  immigrants  and  the  incidental  settle- 
ment of  the  middle  and  far  west  developed  a  new  nation, 
very  different  in  its  view  point  from  that  of  the  generation 
which  was  passing  off  the  stage.  This  development  followed 
naturally  the  introduction  of  steam  navigation  and  steam 
railroads  and  in  turn  led  to  a  great  extension  of  these  facilities. 
The  new  inventions  in  the  industrial  field  brought  about  the 
factory  system  and  the  concentration  of  population  in  towns 
and  cities.  The  electric  telegraph  transformed  the  methods 
of  communication.  There  was,  too,  a  great  intellectual  and 
spiritual  awakening.  Social  reforms  were  everywhere  in 
progress. 

£  During  this  time  the  war  with  Mexico  was  fought  and  our 
southwestern  boundaries  established.  California,  one  of  our 
acquisitions  from  Mexico,  was  soon  a  powerful  state,  because 
of  the  discovery  of  gold  within  her  borders.  With  the  excep- 
tion of  the  trouble  with  Mexico,  our  foreign  relations  were 
amicable.  It  was  during  this  period  that  all  matters  in  con- 
26] 


FINANCING  DEFICITS  AND  THE  MEXICAN  WAR        [  27 

troversy  with  Great  Britain  in  regard  to  our  northwestern 
boundary  line  were  satisfactorily  settled. 

Just  as  the  first  stage  in  our  industrial  development  had 
ended  in  the  commercial  crisis  of  18 19  and  the  second  in  the 
crisis  of  1837,  so  the  third  had  to  pass  through  a  similar  time 
of  distress  in  1857.  As  we  have  seen,  the  prosperous  years 
following  the  conclusion  of  the  second  war  with  Great  Britain 
came  to  a  distressing  end  in  1837.  The  National  Government 
which  had  been  seeking  ways  and  means  to  dispose  of  a 
surplus  and  had  finally  transferred  over  twenty-eight  million 
dollars  to  the  States,  suddenly  found  itself,  even  while  in  the 
process  of  making  this  distribution,  facing  an  empty  treasury. 
In  his  report  for  1837  Secretary  of  the  Treasury  Woodbury 
pointed  out  that  there  would  be  a  deficit  for  the  year  of 
over  $12,000,000  and  he  estimated  that  in  order  to  meet 
the  expenditures  of  1838  he  would  need  to  borrow  around 
$10,000,000. 

With  the  exception  of  four  years,  viz.: — 1839,  1844,  1845 
and  1846,  there  was  not  another  Treasury  surplus  until  1850; 
then  for  eight  years  there  were  surpluses  again.  In  the 
following  years  up  to  the  beginning  of  the  Civil  War  there 
were  heavy  deficits.  The  distinguishing  feature  of  the  Gov- 
ernment financing  for  this  period  is  the  preference  given  to 
the  use  of  Treasury  notes  which  had  to  be  renewed  from  year 
to  year  rather  than  to  that  of  the  sale  of  funded  obligations. 

Out  of  $236,400,000  borrowed  from  1837  to  i860,  inclusive, 
$133,591,000  or  56.51%  was  taken  in  the  form  of  notes.  A 
large  portion  of  the  bonds  was  issued  for  the  purpose  of 
funding  notes. 

These  notes  were  similar  to  those  used  in  connection  with 
the  financing  of  the  War  of  1812.  In  fact  some  of  the  issues 
are  said  to  have  been  printed  from  the  same  plates.   Most  of 


28  ]  BANKERS  TRUST  COMPANY 

the  issues  carried  interest  at  rates  current  for  high  class  paper, 
but  a  number  of  issues  were  made  bearing  only  a  nominal 
interest  rate  of  one  mill  per  cent,  per  annum,  with  the  expecta- 
tion undoubtedly  that  they  would  circulate  as  currency.  This 
did  not  happen,  however,  as  the  fact  that  the  rate  was 
nominal  led  the  holders  to  cash  them  in  at  the  first  oppor- 
tunity. 

The  notes  were  issued  in  payment  of  debts  due  to  the 
United  States,  to  such  public  creditors  or  other  persons  as 
chose  to  receive  them  in  payment  at  their  par  value.  They 
were  drawn  to  order,  but  were  transferable  by  delivery  and 
assignment.  They  were  receivable  by  the  Treasury  in  pay- 
ment of  duties  and  taxes,  also  in  payment  for  public  lands. 
Most  of  the  issues  provided  that  when  received  into  the 
Treasury  they  might  be  reissued,  but  the  amount  which  could 
be  outstanding  at  any  one  time  was  strictly  limited. 

The  authority  to  issue  such  notes  was  seriously  questioned 
by  strict  constructionists  of  the  Constitution.  They  believed 
that  the  issuance  of  such  notes,  especially  at  nominal  interest 
rates  and  upon  a  promise  to  repurchase  upon  demand,  was 
a  clear  evasion  of  the  inhibition  of  the  Constitution  against 
the  issuance  of  paper  money. 

That  their  fears  were  not  groundless  that  the  effort  might 
be  made  to  issue  such  notes  for  use  as  money  is  evidenced  by 
the  discussion  of  this  subject  to  be  found  in  the  report  of 
Secretary  Spencer  for  the  year  1843.  A  portion  of  his  argu- 
ment is  quoted  here  not  only  for  its  bearing  on  this  particular 
point  but  more  especially  as  it  puts  in  very  clear  form  the 
reasons  generally  advanced  by  the  advocates  of  the  use  of 
such  notes.  He  says:  "The  exigencies  of  the  Treasury  de- 
manded that  the  effort  should  be  made  to  relieve  it  of  such 
a  weight  of  interest,  [as  would  be  made  necessary  by  the 


FINANCING  DEFICITS  AND  THE  MEXICAN  WAR        [  29 

issuance  of  stock  or  of  notes  bearing  a  high  interest  rate] 
especially  as  it  would  not  preclude  a  return  to  the  system 
which  invites  banks  to  hoard  Treasury  Notes,  by  allowing 
them  an  interest,  while  they  borrow  of  the  community,  with- 
out interest,  to  the  extent  of  their  circulation. 

"The  authority  given  by  the  Constitution  to  'borrow 
money  on  the  credit  of  the  United  States,'  in  its  terms  com- 
prehends every  form  of  loan  which  Congress  may  think 
proper  to  prescribe;  and  it  is  not  easy  to  perceive  how  this 
express  and  unqualified  grant  of  power  can  be  limited  or 
curtailed.  Certain  it  is  that  the  most  distinguished  among 
those  who  contend  for  a  strict  construction  of  the  Constitu- 
tion, have  given  their  sanction  to  the  existence  of  this  power, 
in  form  of  bills  of  credit  or  Treasury  Notes. 

"Well-founded  objections  exist  to  borrowing,  without  an 
urgent  necessity,  in  the  form  either  of  permanent  loans  or 
those  of  a  temporary  character.  That  necessity  must  also 
influence  the  terms  and  conditions  of  either  mode.  The  former 
by  putting  off"  the  day  of  payment  to  'a  more  convenient 
season'  removes  the  most  effectual  check  to  prodigality,  and 
offers  a  temptation  of  difficult  resistance.  It  has,  accordingly, 
proven  the  bane  of  all  governments. 

"The  policy  of  the  Treasury  note  system  seems  to  have 
been  devised  to  guard  against  this  evil  [of  putting  off"  the  day 
cf  payment  to  'a  more  convenient  season']  by  bringing  the 
day  of  payment  close  upon  that  of  expenditure;  and  it  would 
seem  that  the  more  immediate  the  liability  to  pay,  the  more 
would  that  policy  be  promoted."  .  .  . 

"Every  loan  thus  made  directly  from  the  people  [at  a 
nominal  interest  rate]  is  in  fact  made  not  in  consideration  of 
the  interest  agreed  to  be  paid  by  the  Government,  but  liter- 
ally and  solely  upon  'the  credit  of  the  United  States.'" 


3<dJ  bankers  trust  company 

He  then  argues  that  if  the  notes  in  addition  to  serving  the 
purpose  of  the  Government  are  "kept  in  circulation  to  any 
considerable  extent,  by  our  fellow  citizens,  for  their  own  con- 
venience in  maintaining  internal  trade,  and  keeping  down  the 
fluctuations  of  exchange  between  different  parts  of  the  coun- 
try, arising  from  a  disordered  currency,  it  is  not  perceived 
how  such  a  result  affords  ground  for  objection  to  a  system 
constitutional  in  itself  and  adopted  for  legitimate  and  con- 
stitutional objects." 

He  further  argues  that  the  Government  is  not  responsible 
"for  the  use  or  abuse  by  the  people  of  the  evidence  of  that 
debt  which  it  may  issue." 

The  fact  is  that  the  notes  never  did  circulate  to  any  im- 
portant extent  as  money.  Spencer's  views  in  regard  to  mak- 
ing the  notes  attractive  for  such  a  purpose  were  not  generally 
shared  and  therefore  the  rates  of  interest  offered  were  sub- 
stantial and  the  notes  were  readily  absorbed  as  a  prime  in- 
vestment. In  fact  they  were  frequently  quoted  above  par, 
their  market  quotations  fluctuating  with  the  money  market. 

Secretary  Ewing  in  his  report  for  1841  in  discussing  the 
needs  of  the  Treasury  strongly  advised  against  the  use  of 
Treasury  notes,  finding  such  issues  objectionable  because  "by 
this  means  a  heavy  debt  may  be  raised  and  fastened  per- 
manently upon  the  country,  the  amount  of  new  issues  being 
involved  with  the  payment  of  the  old,  while  the  people  and 
even  those  who  administer  the  finances,  may  not  be  impressed 
with  the  important  fact  that  a  national  debt  is  created  or  is 
in  process  of  creation. 

"Therefore,  in  the  opinion  of  the  undersigned,  when  a 
national  debt  does  exist,  and  must  continue  for  a  time,  it  is 
better  that  it  should  be  made  a  funded  debt  according  to  our 


FINANCING  DEFICITS  AND  THE  MEXICAN  WAR        [  3 1 

ancient  financial  usage.  It  is  then  sheltered  by  no  cover  and 
is  subject  to  no  delusion." 

The  principal  purposes  for  which  bonds  or  notes  were  issued 
during  this  period,  besides  financing  the  Treasury  deficits  of 
the  early  and  later  years,  were  to  finance  the  war  with  Mexico 
and  to  adjust  accounts  with  the  Republic  of  Texas  when  she 
became  a  State  of  the  Union. 

The  cost  of  the  Mexican  War  is  estimated  to  have  been 
$63,605,621.  Of  this  amount  $14,605,621  or  about  23%  was 
met  from  revenue  and  for  the  balance  of  $49,000,000,  bonds 
and  notes  were  issued.  Contrary  to  the  experience  of  the 
Treasury  in  financing  the  War  of  181 2  every  dollar  of  debt 
sold  realized  par  in  specie.  This  was  due  to  the  discontinuance 
of  the  policy  of  depositing  the  revenues  of  the  Government  in 
banks  and  of  substituting  therefor  the  Independent  Treasury 
system.  By  this  system  the  operations  of  the  Government 
were  wholly  divorced  from  the  banks  and  all  payments  to  or 
by  the  Treasury  were  made  in  specie.  The  adoption  of  such  a 
system  became  a  practical  necessity  after  President  Jackson's 
removal  of  the  deposits  from  the  second  Bank  of  the  United 
States  had  left  the  Government  without  any  reliable  banking 
facilities.  The  Independent  Treasury  system  or,  as  Secretary 
Guthrie  liked  to  designate  it,  the  "Constitutional"  treasury 
system  continued  in  operation  until  the  Federal  Reserve 
System  recently  came  into  being.  It  saved  the  Government 
from  losses  but  at  times,  especially  when  large  surplus  rev- 
enues accumulated,  it  operated  to  lock  up  funds  in  the  Treas- 
ury to  the  great  detriment  of  the  business  interests  of  the 
country.  For  years  the  only  manner  in  which  Treasury  sur- 
pluses could  be  released  and  returned  to  the  channels  of 
business  was  by  the  payment  or  purchase  of  the  public  debt. 
The  existence  of  such   a  debt  was  almost   a  necessity  for 


32  ]  BANKERS  TRUST  COMPANY 

regulatory  purposes  and  the  Secretary  of  the  Treasury  be- 
came the  most  powerful  financial  officer  in  the  world.  The 
safety  of  the  business  interests  of  the  country  was  to  a  great 
extent  in  his  keeping. 

The  maximum  debt  following  the  liquidation  of  1835  and 
prior  to  the  Civil  War  was  $68,304,796  on  July  1,  1851. 

As  Treasury  surpluses  caused  apprehension  and  alarm  in 
commercial  and  financial  circles,  means  were  taken  during 
1853  to  restore  these  accumulations  to  circulation  by  pur- 
chasing bonds  and  also  by  putting  the  mint  in  funds  to  buy 
silver  and  gold  bullion  for  coinage.  Premiums  were  paid  as 
high  as  21%. 

In  his  report  for  December  6,  1856,  Secretary  Guthrie 
writes:  ''The  Independent  Treasury  may  exercise  a  fatal  con- 
trol over  the  currency,  the  banks  and  the  trade  of  the  country, 
and  will  do  so  whenever  the  revenue  shall  greatly  exceed  the 
expenditures. 

"There  has  been  expended,  since  the  4th  of  March,  1853, 
more  than  $45,525,000  in  the  redemption  of  the  public  debt. 
This  debt  has  been  presented  from  time  to  time,  as  the 
money  accumulated  in  the  national  treasury  and  caused 
stringency  in  the  money  market.  If  there  had  been  no  public 
debt,  and  no  means  of  disbursing  this  large  sum,  and  again 
giving  it  to  the  channels  of  commerce,  the  accumulated  sum 
would  have  acted,  fatally,  on  the  banks  and  on  trade.  The 
only  remedy  would  have  been  a  reduction  of  the  revenue, 
there  being  no  demand  and  no  reason  for  increased  ex- 
penditure." 

In  1857,  the  financial  crisis  of  that  year,  which  had  cast 
its  shadow  ahead,  broke  over  the  country  with  great  force. 
In  the  beginning  of  that  year  the  Treasury  held  nearly 
$18,000,000  in  cash,  but  it  was  a  year  of  diminishing  receipts 


FINANCING  DEFICITS  AND  THE  MEXICAN  WAR        [  33 

and  a  deficit  for  the  following  year  was  clearly  forecast.  How- 
ever, during  the  year  the  Treasury  had  tried  to  alleviate  the 
distress  by  continuing  the  purchase  of  debt.  The  Secretary, 
Howell  Cobb,  reasoned  that  if,  as  a  result  of  following  this 
course,  the  Treasury  was  compelled  to  resort  to  a  loan  "it 
would  suffer  no  injury  from  having  the  character  of  the  loan 
changed  from  debts  falling  due  at  a  distant  period  to  Treasury 
notes,  at  a  less  rate  of  interest,  and  which  could  be  redeemed 
at  the  pleasure  of  the  department." 

There  was  no  further  important  happening  connected  with 
the  history  of  the  public  debt  until  four  years  later,  when  the 
outbreak  of  the  Civil  War  brought  the  country  face  to  face 
with  financial  problems  of  a  most  serious  character. 


Chapter  VI 
Civil  War  Financing 

ON  July  4,  1861,  President  Lincoln  convened  Congress 
in  special  session  in  order  that  they  might  "give  the 
legal  means  for  making  this  contest  [with  the  States  in  re- 
bellion] a  short  and  decisive  one."  He  recommended  that 
Congress  "place  at  the  control  of  the  Government,  for  the 
work,  at  least  four  hundred  thousand  men  and  $400,000,000." 
On  the  same  day  the  Secretary  of  the  Treasury,  Salmon  P. 
Chase,  reported  to  Congress  in  regard  to  the  condition  of  the 
Treasury  and  made  recommendations  as  to  ways  and  means 
for  conducting  the  war. 

His  policy  was  expressed  in  the  following  words: — "It  will 
hardly  be  disputed  that  in  every  sound  system  of  finance 
adequate  provision  by  taxation  for  the  prompt  discharge  of 
all  ordinary  demands,  for  the  punctual  payment  of  the  interest 
on  loans,  and  for  the  creation  of  a  gradually  increasing  fund 
for  the  redemption  of  the  principal,  is  indispensable.  Public 
credit  can  only  be  supported  by  public  faith,  and  public  faith 
can  only  be  maintained  by  an  economical,  energetic  and  pru- 
dent administration  of  public  affairs,  and  by  the  prompt  and 
punctual  fulfillment  of  every  public  obligation."  This  was 
identically  the  same  theory  of  war  financing  as  that  advanced 
by  Gallatin  in  1807,  when  discussing  the  ways  and  means  of 
financing  a  possible  war  with  Great  Britain  or  France  and 
was  the  policy  which  was  followed  with  such  unsatisfactory 
results  in  financing  the  War  of  1812. 

341 


CIVIL  WAR  FINANCING  [  35 

The  situation  was  complicated  in  1861,  just  as  it  had  been 
in  1 81 2,  by  the  fact  that  there  was  no  strong  central  bank, 
around  which  the  banking  interests  of  the  country  could  rally 
to  the  support  of  the  Government. 

Chase  had  already  demonstrated  in  the  four  months  in 
which  he  had  been  in  office  how  little  reliance  for  help  of  an 
important  character  could  be  put  upon  the  bankers  of  that 
day.  There  was  no  way  to  mobilize  the  financial  resources  of 
the  country. 

In  his  report  for  1862  Chase  estimated  that  the  banks, 
which,  by  the  way,  had  all  suspended  specie  payments  in 
December,  1861,  had  about  that  date  circulation  $130,000,000, 
deposits  $264,000,000  and  loans  $607,000,000,  or  total  re- 
sources of  around  one  billion  dollars.  Each  group  of  banks 
was  a  law  to  itself.  In  fact  there  was  not  even  the  concert  of 
action  between  banks  in  any  given  group  which  such  an 
exigency  required. 

This  state  of  affairs  was  the  principal  reason  advanced  in 
support  of  the  policy  of  the  issuance  of  United  States  notes 
which  was  one  of  the  measures  adopted  by  Congress  in  the 
special  session  of  1861.  This  first  issue  was  limited  to 
$50,000,000,  and  up  to  the  date  of  the  general  suspension  of 
specie  payments  every  note  presented  for  payment  was 
promptly  redeemed  in  coin.  This  issue  was  accepted  also  in 
payment  for  customs  duties.  In  the  following  year,  on  the 
25th  of  February,  Congress  enacted  a  law  providing  for  an 
issue  of  $150,000,000  United  States  notes,  which  were  to  be 
lawful  money  and  a  legal  tender  in  payment  of  all  debts, 
public  and  private,  except  duties  on  imports  and  the  interest 
on  the  public  debt.  Subsequent  legislation  increased  the 
authorized  issues  to  $450,000,000  and  this  maximum  was 
reached  in  June,  1864.   The  right  of  legal  tender  was  also 


36]  BANKERS  TRUST  COMPANY 

given  interest-bearing  Treasury  notes  of  which  $477,595,000 
were  issued;  a  total  of  obligations  having  legal  tender  rights 
amounting  to  nearly  $1,000,000,000. 

The  reasons  advanced  by  the  advocates  of  the  issue  of  legal 
tender  notes,  more  particularly  the  "Greenbacks"  or  non- 
interest  bearing  notes,  were  various.  Perhaps  that  having 
the  greatest  justification  was  that  the  people  could  obtain  a 
currency  uniform  in  character  and  in  value  throughout  the 
Union,  instead  of  a  bank  currency  of  fluctuating  and  uncer- 
tain value,  and  liable  to  have  no  value  in  case  of  the  failure 
of  an  issuing  bank.  It  was  also  frequently  stated  by  Secretary 
Chase  that  through  such  an  issue  the  Government  obtained 
needed  funds  at  a  large  saving  in  interest!  Little  did  he  realize 
what  a  tremendous  price  would  be  exacted  for  this  interest 
immunity,  because  of  the  great  actual  discount  at  which 
future  loans  would  be  sold,  nor  what  the  cost  was  to  be  of 
restoring  the  currency  to  a  specie  basis  and  of  maintaining 
it  on  such  a  basis.  Then  there  was  the  plea  of  necessity,  "no 
other  mode  of  providing,  with  any  tolerable  degree  of  promp- 
titude, for  the  wants  of  the  army  and  navy,  and  the  necessities 
of  other  branches  of  the  public  service,  seemed  likely  to  effect 
the  object  with  so  little  public  inconvenience." 

While  considering  banking  and  currency  problems  refer- 
ence may  be  made  at  this  point  to  the  creation  of  the  national 
banking  system.  In  his  report  to  Congress  made  in  December 
1 861,  Secretary  Chase  strongly  recommended  as  an  alterna- 
tive to  the  plan  of  issuing  legal  tender  notes,  the  plan  of 
issuing  "to  institutions  and  associations,  notes  prepared  for 
circulation  under  national  direction,  and  to  be  secured  as  to 
prompt  convertibility  into  coin  by  the  pledge  of  United  States 
bonds  and  by  other  needful  regulations."  The  purpose  was 
twofold.     "To  give  to  the  people  uniformity  in  currency;  uni- 


CIVIL  WAR  FINANCING  [  37 

formity  in  security;  of  effectual  safeguards,  if  effectual  safe- 
guard is  possible,  against  depreciation;  and  of  protection  from 
losses  in  discounts  and  exchanges,"  and  secondly,  the  correl- 
ative advantage  to  the  Government  of  "increased  facilities 
for  obtaining  the  loans  required  by  the  war."  This  plan  was 
developed  into  the  national  banking  system  which  was  author- 
ized by  Congress  in  1863. 

Another  method  of  war  financing  by  borrowing  operations 
was  the  receipt  by  the  Treasury  Department  of  special 
deposits  upon  which  a  moderate  interest,  usually  5%,  was 
allowed. 

The  two  great  war  loans  were  the  three-year  notes  bearing 
interest  at  the  rate  of  two  cents  a  day  on  each  one  hundred 
dollars — the  "Seven-Thirties"  as  they  were  called,  and  the 
six  per  cent  bonds  redeemable  after  five  years  and  payable  in 
twenty  years  from  date,  popularly  known  as  "Five-Twenties." 
They  were  payable  principal  and  interest  in  coin,  while  the 
"Seven-Thirties"  were  payable  in  currency.  The  latter  were 
convertible  at  the  pleasure  of  the  holder  into  the  "Five- 
Twenties." 

Secretary  Chase  in  his  financing  kept  four  objects  in  view: 
"(1)  moderate  interest;  (2)  general  distribution;  (3)  future 
controllability;  and  (4)  incidental  utility." 

In  his  endeavor  to  accomplish  these  objects  he  made  the 
mistake  of  issuing  too  many  obligations  of  very  short  matur- 
ity, and  at  times  he  defeated  his  efforts  at  distribution  by 
offering  too  low  a  rate  of  interest.  He  admitted  that  his  best 
success  had  come  when  he  had  used  the  facilities  afforded  by 
a  financial  agent  to  whom  a  reasonable  commission  was  paid 
for  the  services  of  himself  and  associates. 

The  war  ended  in  April,  1865,  but  the  debt  did  not  reach 
its  maximum  until  August,  when  it  stood  at  $2,844,649,626. 


38  ]  BANKERS  TRUST  COMPANY 

The  cash  in  the  Treasury  at  thattimewas $88, 218,055, making 
the  net  debt  $2,756,431,571.  Of  the  gross  debt,  $2,381,- 
530,294  bore  interest  at  an  average  rate  in  excess  of  6%; 
on  $1,503,020  interest  had  ceased  and  $461,616,311  was  non- 
interest  bearing  debt — the  United  States  notes. 

The  total  cost  of  the  war,  taking  the  period  from  June  30, 
1861,  to  June  30,  1866,  because  all  the  war  bills  could  not  have 
been  liquidated  much  before  that  date,  may  be  closely  esti- 
mated at  $3,500,000,000.  This  figure  is  arrived  at  by  making 
an  allowance  for  normal  peace  disbursements  and  receipts, 
and  for  cash  in  the  Treasury  at  the  end  of  the  period.  Of  this 
amount  about  one  billion  may  be  said  to  have  come  from  rev- 
enue and  the  remaining  two  and  a  half  billion  from  borrowing 
— say  about  in  the  proportion  of  30%  revenue  and  70%  loans. 

The  revenue  receipts  really  only  became  an  important 
factor  toward  the  end  of  the  war.  Prior  to  the  war  the  Gov- 
ernment had  derived  its  revenue  for  years  almost  entirely 
from  customs  duties.  There  had  been  no  internal  revenue 
from  any  source  and  in  the  years  just  before  the  war  the 
income  from  the  sales  of  public  lands  had  been  relatively  un- 
important. The  total  revenue  receipts  in  the  fiscal  year  1862 
were  only  $51,919,000  against  disbursements  of  $469,570,000 
or  only  about  11%;  in  1863  the  revenue  receipts  were  $112,- 
094,000  as  against  disbursements  of  $718,734,000,  say  15.6%; 
in  1864  $243,412,000  against  $864,969,000  or  28%.  In  1865 
the  disbursements  reached  the  very  heavy  total  of  $1,295,- 
099,000.  The  revenue  receipts  were  quite  substantial, 
$322,031,000,  but  they  reached  only  24.86%  of  the  total. 

In  1866  the  direct  war  expenses  were  over  and  therefore 
the  disbursements  declined  to  the  relatively  small  total  of 
$519,022,000  while  the  receipts  were  $519,949,564. 

The  cost  of  the  war  was  undoubtedly  substantially  in- 


CIVIL  WAR  FINANCING  [  39 

creased  because  of  the  resort  to  the  issue  of  legal  tender  notes 
in  such  large  volume.  How  great  a  part  of  the  rise  in  prices 
should  be  attributed  to  this  cause  it  is  difficult  to  determine. 
The  greatest  depreciation  occurred  in  1864.  On  July  1st  of 
that  year  a  paper  dollar  was  worth  only  38.7  cents.  The  aver- 
age gold  value  of  United  States  notes  for  the  four  years  of 
the  war  was  67.5  cents.  The  average  value  for  1864  was 
49.2  cents.  In  1865,  the  year  of  the  greatest  disbursements, 
this  average  value  was  63.6  cents. 

If  we  apply  these  figures  to  the  borrowings  of  these  years 
it  will  be  noted  that  while  the  Treasury  was  nominally  borrow- 
ing its  long-time  money  in  1864  at  6%,  it  was  actually  paying 
over  12%  and  in  1865  the  actual  cost  of  nominal  6%  money 
was  fully  a  third  higher,  or  8%.  It  would  be  interesting  to 
pursue  this  matter  further,  but  such  a  study  is  one  for  the 
economist  rather  than  for  the  chronicler  of  the  story  of  our 
public  debt. 


Chapter  VII 
Liquidating  the  War  Debt 

THE  sudden  cessation  of  hostilities;  the  return  of  a  great 
army  of  men  to  the  pursuits  of  peace;  the  adjustment 
of  business  to  a  class  of  conditions  essentially  different  from 
those  prevailing  before  the  war  and  during  the  war,  involved 
many  sacrifices.  The  speculative  fever  raised  by  the  war 
subsided  but  slowly,  and  was  followed  by  much  distress  and 
a  period  of  reaction  which  tried  men's  souls  perhaps  more 
effectually  than  the  dreadful,  but  exciting,  war  times. 

The  great  expansion  of  the  currency  from  a  bank  circulation 
estimated  at  about  two  hundred  million  dollars  and  specie 
two  hundred  and  forty-eight  million  (#13.85  per  capita)  in 
1861,  to  a  bank  and  treasury  circulation  of  seven  hundred  and 
fifteen  million  dollars,  in  1865,  practically  all  paper  (#20.58 
per  capita),  accompanied  by  a  suspension  of  specie  payments, 
wrought  a  vast  change  in  the  business  methods  of  the  country. 
Industry,  in  all  its  phases,  had  been  wonderfully  stimulated, 
Fortunes  were  quickly  made,  quickly  lost.  Speculation,  gam- 
bling, belief  in  luck  were  the  order  of  the  hour.  The  whole 
country  was  exhilarated. 

When  the  war  stopped  manufactures  of  military  supplies 
of  all  kinds  suddenly  ceased.  The  commercial  activity 
aroused  by  the  war  sought  new  fields,  and  found  them  in 
great  schemes  for  developing  the  country. 

Capital  poured  into  all  forms  of  fixed  investment. 
40  J 


LIQUIDATING  THE  WAR  DEBT  [  41 

The  railroad  to  the  Pacific  was  rapidly  built,  aided  by  the 
Government  as  the  project  was,  by  liberal  land  subsidies  and 
the  loan  of  6%  United  States  bonds  to  an  aggregate  of 
#64,623,512.  The  railroad  systems  of  the  entire  country  were 
extended — increasing  successively  at  the  rate  of  one,  two, 
three,  five,  six,  seven  thousand  miles  a  year. 

Cities  and  towns  were  founded,  manufacturing  plants  con- 
structed and  put  in  operation,  mines  developed.  Immense 
sums  were  spent  in  developing  our  agricultural  resources. 

The  industrial  development  had  proceeded  so  rapidly  that 
it  soon  began  to  be  apparent  that  improvements  had  been 
made  and  products  created  in  advance  of  the  needs  of  the 
country  and  its  ability  to  carry  them.  The  spectre  of  re- 
pudiation spread  its  wings  over  the  land  and  for  a  time  even 
the  good  name  of  the  nation  was  in  jeopardy — a  proposition 
being  made  to  pay  the  bonds  in  greenbacks. 

Although  it  was  foreseen  that  the  country  must  inevitably 
pass  through  a  period  of  financial  distress  and  that  there 
must  be  a  liquidation  and  readjustment  of  private  and  cor- 
porate burdens  which  would  involve  great  losses,  yet  there 
were  enough  men  with  clear  vision  who  had  the  wisdom,  the 
courage  and  the  honesty  to  fight  the  repudiating  spirit  to  the 
death.  A  strong  fight  was  carried  on  in  and  out  of  Congress 
which  resulted  in  the  passage  of  the  Public  Credit  Act,  which 
act  stated  that  it  was  the  purpose  of  the  Government  to  dis- 
charge all  just  obligations  to  the  public  creditors  in  coin  or 
its  equivalent,  except  in  cases  where  the  law  authorizing  the 
issue  of  any  such  obligation  had  expressly  provided  that  the 
same  might  be  paid  in  lawful  money  or  other  currency  than 
gold  or  silver. 

The  effect  of  the  passage  of  this  act  was  to  completely  re- 
assure the  creditors  of  the  nation. 


42  ]  BANKERS  TRUST  COMPANY 

From  this  time  on  to  1879,  when  specie  payments  were 
resumed,  there  was  a  gradual  increase  in  the  gold  value  of  the 
legal  tender  notes  and  also  a  gradual  fall  in  the  nominal  rate 
of  interest  paid  on  the  Government's  loans.  As  a  result,  the 
actual  rate  of  interest  paid  on  United  States  bonds  in  1869 
was  about  7^i%,  in  1870  about  6$4%,  in  1871  to  1876,  in- 
inclusive,  around  6^i%.  In  1877  there  was  a  decided  im- 
provement to  around  sH% — tne  average  interest  paid  falling 
to  about  $}4%  ana"  tne  gold"  value  of  the  notes  rising  to  95.4%. 
Notes  and  gold  were  practically  at  par  in  1878. 

However,  the  true  criterion  of  the  Government's  credit  is 
not  the  average  rate  which  was  paid  on  all  bonds  outstanding 
but  the  interest  basis  upon  which  new  loans  could  be  placed 
from  time  to  time,  that  is,  the  market  valuation.  This  is 
developed  in  the  following  pages. 

The  credit  of  the  Government  could  not  but  improve  be- 
cause, immediately  the  war  was  over,  debt  payment  on  a 
large  scale  began. 

As  a  matter  of  fact  the  taxes  which  had  been  imposed  for 
the  purpose  of  raising  revenues  for  the  prosecution  of  the  war 
only  began  to  be  largely  effective  after  hostilities  had  ceased. 
In  1866  the  total  ordinary  receipts,  that  is,  exclusive  of  postal 
revenues  and  borrowed  money,  were  $519,949,000;  in  1867 
they  were  $462,846,000.  Then  for  several  years  the  receipts 
ranged  around  $370,000,000.  From  1866  to  1893,  inclusive, 
there  was  but  one  year  in  which  the  ordinary  receipts  of  the 
Government  did  not  largely  exceed  disbursements,  including 
postal  deficits,  interest  and  pensions.  The  Government  thus 
was  put  in  a  position  to  largely  reduce  its  debt  and  to  take 
steps  to  set  its  house  in  order  financially.  The  decrease  in  the 
net  debt  at  the  end  of  the  fiscal  year  1866  compared  with  the 
maximum  of  August  31,   1865,  was  $120,395,408.    The  de- 


LIQUIDATING  THE  WAR  DEBT  [  43 

crease  in  the  fiscal  year  1867  was  $127,884,952;  in  1868, 
$27,297,798;  in  1869,  $48,081,540;  in  1870,  $101,601,917; 
in  1871,  $84,175,888;  in  1872,  $97,213,538;  and  in  1873, 
$44,318,470.  Even  in  the  fiscal  year  1874,  which  included  the 
period  of  the  1873  financial  crisis,  the  net  debt  decreased 
$1,312,907.  In  fact  there  was  not  a  single  year  from  1865  to 
1893,  that  the  debt  less  cash  in  the  treasury,  that  is  the  net 
debt,  did  not  decrease. 

In  addition  to  bonds  and  short-time  obligations  redeemed 
or  bought  with  surplus  revenues  there  were  paid  off  up  to 
and  including  the  fiscal  year  1880,  through  refunding  opera- 
tions, $1,395,347,800  bonds  bearing  interest  at  the  rate  of 
5%  and  6%.  For  this  purpose  there  were  sold  at  par  in  coin 
$500,000,000  5's,  $185,000,000  4K's  and  $710,345,950  4's. 

From  a  maximum  actual  interest  basis  of  15^2%  during 
the  height  of  the  war  in  1864  the  credit  of  the  government 
steadily  improved  until  by  1879  it  was  on  a  4%  basis  and  in 
1880  on  a  3>i%  basis. 

On  the  first  day  of  January,  1879,  specie  payments  were 
resumed.  In  preparation  therefor,  the  Secretary  of  the  Treas- 
ury, in  addition  to  some  $30,000,000  in  gold  accumulated  from 
customs  receipts,  had  in  hand  $96,000,000  obtained  through 
the  sale  of  $95,500,000  4>2%  and  4%  bonds  issued  under  the 
terms  of  the  Act  approved  January  14,  1875,  known  as  the 
Resumption  Act.  In  time  this  fund  came  to  be  known  as  the 
"gold  reserve,"  and  in  the  bank  act  approved  July  12,  1882, 
in  a  section  providing  for  the  issue  of  gold  certificates,  the 
sum  of  $100,000,000  was  prescribed  by  Congress  as  the  limit 
to  which  the  gold  reserve  might  be  reduced  without  affecting 
the  issue  of  gold  certificates.  Subsequently,  under  the  terms 
of  the  Acts  of  March  14th,  1900  and  May  30th,  1908,  the 
reserve  was  raised  to  $152,977,036,  at  which  amount  it  has 


44  J  BANKERS  TRUST  COMPANY 

since  been  maintained.  The  Secretary  of  the  Treasury  was 
required  by  the  Act  of  March  14th,  1900,  to  maintain  the 
parity  of  all  forms  of  money  issued  or  coined  by  the  United 
States  with  the  gold  dollar,  which  is  declared  the  standard 
unit  of  value.  The  act,  however,  gave  no  specific  authority 
to  sell  bonds  for  the  purpose  of  maintaining  this  parity 
provision.  Under  the  terms  of  the  Federal  Reserve  Act  this 
provision  of  the  Act  of  March  14th,  1900,  is  reaffirmed,  and 
the  Secretary  of  the  Treasury  is  given  authority  for  this  pur- 
pose to  borrow  gold  on  the  security  of  United  States  bonds 
authorized  under  this  act  or  in  exchange  for  one-year  gold 
notes  bearing  interest  at  a  rate  not  to  exceed  three  per  cent 
per  annum;  or  to  sell  the  same  if  necessary  to  obtain  gold. 

In  1 881  the  Government  had  the  right  to  redeem  #671,916,- 
000  6's  and  5's.  A  refunding  bill  was  passed  by  Congress  but 
was  vetoed  by  President  Hayes  because  of  provisions  in- 
corporated therein  which  were  manifestly  unfair  to  the  na- 
tional banks. 

Secretary  of  the  Treasury  Windom  then  offered  the  bond- 
holders the  privilege  of  "continuing"  their  bonds  during  the 
pleasure  of  the  Government  with  interest  at  3^2%.  No  fixed 
date  of  payment  was  set.  This  privilege  was  accepted  by  the 
holders  of  #178,055,150  6's  and  of  #401,504,900  5's;  or,  in  all 
by  the  holders  of  #579,560,050  bonds.  This  operation  was  a 
brilliant  success.  The  saving  of  interest  was  on  the  basis  of 
#10,500,000  annually,  while  the  cost  to  the  Government  was 
less  than  #10,500.  The  income  of  the  Government  continued 
to  be  so  large,  however,  that  in  September,  1881,  the  Treasury 
began  to  pay  off  the  "continued"  3^2's.  By  the  close  of  1883 
these  bonds  had  all  been  retired,  partly  by  cash  payments 
and  partly  by  conversion  of  #305,581,250  into  3's  under  the 


LIQUIDATING  THE  WAR  DEBT  [  45 

terms  of  an  act  of  Congress  passed  July  12,  1882.  The  3's 
were  in  turn  all  paid  off  by  the  close  of  1887. 

Having  retired  all  bonds  which  it  had  the  right  to  call 
for  payment  the  Government  was  then  forced  to  go  into  the 
open  market  and  buy  bonds  as  the  only  way  of  releasing  for 
the  uses  of  business  its  large  surplus  revenues.  The  sum  of 
over  $56,000,000  was  expended  in  premiums  during  the  next 
four  years  and  over  $360,000,000  bonds  bought  and  cancelled. 

In  1 891  the  4/4%  bonds  became  redeemable  and  during 
that  year  and  the  two  years  following  were  all  retired,  except- 
ing the  amount  of  $25,364,500  which  the  holders  were  per- 
mitted to  "continue"  at  2%  interest.  On  July  1,  1893,  the 
debt,  less  cash  in  the  Treasury,  amounted  to  only  #838,- 
969,475,  or  less  than  one-third  of  the  maximum  outstanding 
in  1865.  The  reduction  of  the  debt  ceased  in  1893.  After 
that  year  there  were  some  moderate  increases,  which  will  be 
hereafter  referred  to,  and  then  the  debt  became  practically 
stationary  until  we  became  involved  in  the  war  with  Germany. 


Chapter  VIII 
Fighting  "Gresham's  Law" 

IT  has  been  a  misfortune  in  connection  with  our  national 
financing  that  from  the  beginning  of  our  history  the 
requirements  of  the  Treasury  have  been  confused  with  other 
issues. 

From  the  day  of  Hamilton  until  the  present  customs  tariffs 
have  been  laid  with  the  double  object  in  view  of  obtaining 
revenue  and  of  affording  a  greater  or  lesser  degree  of  "pro- 
tection" to  manufacturing  industries. 

The  currency  has  perpetually  been  in  politics.  The 
"fathers"  had  so  recently  experienced  the  suffering  and  loss 
incident  to  the  use  of  an  inconvertible  paper  currency  that 
they  placed  in  the  Constitution  a  provision  that  "no  State 
shall  .  .  .  emit  bills  of  credit"  or  "make  anything  but  gold 
and  silver  coin  a  tender  for  debt."  So  far  as  the  Federal  Gov- 
ernment is  concerned,  while  the  Constitution  contains  no 
express  prohibition  against  the  use  of  paper  money,  there  is 
no  authority  given  for  its  issue.  The  reports  of  the  debate 
in  the  Convention  show  that  there  was  an  unanimity  of 
feeling  against  the  exercise  of  any  such  authority. 

Until  the  outbreak  of  the  Civil  War  the  issuing  of  circulat- 
ing notes  had  been  left  to  the  banks  exclusively.  Unfortu- 
nately the  prohibition  against  such  issues  by  the  States  was 
construed  not  to  forbid  the  issuance  of  notes  by  State 
chartered  banks. 
46] 


FIGHTING  "gRESHAm's  LAW"  [  47 

This  brought  the  State  banks  into  competition  with  the 
United  States  banks  and  finally,  in  Jackson's  administration 
to  the  complete  triumph  of  the  State  banking  idea  over  the 
central  or  national  banking  plan.  The  losses  and  incon- 
veniences involved  in  dealing  with  the  State  banks  brought 
about,  in  1846,  the  introduction  of  the  Independent  Treasury 
system,  by  which  system  the  receipt,  custody  and  disburse- 
ment of  the  moneys  of  the  Government  were  handled  abso- 
lutely by  the  Treasury  itself. 

The  unsatisfactory  character  of  the  circulating  medium 
supplied  by  the  State  banks  was  one  of  the  principal  reasons 
assigned  in  1861  for  authorizing  the  issuance  of  legal  tender 
notes  by  the  Federal  Government  and  in  1863  for  the  organi- 
zation of  the  national  banks. 

In  1878  Congress  passed  an  act  restoring  to  the  silver  dollar 
its  full  legal  tender  character  and  authorizing  the  Secretary  of 
the  Treasury  to  purchase  silver  bullion  at  the  market  price, 
not  less  than  $2,000,000  nor  more  than  $4,000,000  worth  per 
month  and  to  coin  the  same  into  dollars.  Provision  was  made 
also  for  the  issuance  of  silver  certificates  upon  deposit  of 
silver  dollars.  While  these  certificates  were  not  made  a  legal 
tender,  they  were  made  receivable  for  customs,  taxes  and  all 
public  dues  and  when  so  received  might  be  reissued. 

This  was  clearly  not  primarily  a  currency  measure  but,  as 
its  advocates  frankly  admitted,  was  intended  to  make  a  special 
market  for  a  home  product  which  was  rapidly  deteriorating 
in  market  value. 

In  1879  specie  payments  were  resumed  under  the  terms  of 
the  Act  of  January  14,  1875,  which  provided  for  the  accumu- 
lation of  a  gold  reserve  and  which  provided  that  the  Treasury 
should  "redeem  in  coin  the  United  States  legal  tender  notes 
then  outstanding,  on  their  presentation  for  redemption."   It 


48 ]  BANKERS  TRUST  COMPANY 

also  provided,  however,  that  when  redeemed  the  notes  should 
not  be  cancelled  but  should  be  reissued.  It  must  be  born  in 
mind  that  "coin"  at  that  time  was  gold  coin,  silver  having 
been  demonetized  in  1873. 

The  result  of  the  silver  purchase  legislation  was  to  add  an 
increasing  amount  to  the  volume  of  paper  which  must  be 
maintained  at  par  with  gold. 

The  large  Treasury  surpluses  which  obtained  until  1892, 
inclusive,  made  this  comparatively  easy,  especially  so  in  view 
of  the  fact  that  the  rapid  retirement  of  United  States  bonds 
by  redemption  and  by  purchase  in  the  market  at  high 
premiums  made  it  an  object  for  the  national  banks  to  retire 
their  circulation,  in  order  to  take  the  profit  on  their  bonds. 

Thus  while  the  circulation  of  silver  certificates  had  by 
June  30,  1892,  reached  the  large  sum  of  $326,880,000,  the 
circulation  of  national  bank  notes  fell  off"  from  a  maximum 
of  $356,399,000  on  March  31,  1882,  to  $167,306,000  on  June 
30,  1892. 

Nevertheless  the  total  circulation  of  all  kinds  increased 
from  $729,132,634  or  $15.32  per  capita,  on  June  30th,  1878, 
the  year  before  the  silver  purchase  act  went  into  effect,  to 
$1,601,347,187  or  $24.60  per  capita  on  June  30th,  1892. 

The  problem  of  the  Treasury  was  greatly  aggravated  in 
1890  by  the  enactment  on  July  14th  of  a  law,  in  place  of  the 
1878  legislation,  requiring  the  Secretary  to  purchase  monthly 
4,500,000  ounces  of  silver  bullion  and  to  pay  for  the  same  in 
legal  tender  notes.  This  act  contained  a  direction  to  the 
Secretary  of  the  Treasury,  "under  such  regulations  as  he  may 
prescribe,  to  redeem  such  notes  in  gold  or  silver  coin,  at  his 
discretion,  it  being  the  established  policy  of  the  United  States 
to  maintain  the  two  metals  on  a  parity  with  each  other  upon 
the  present  legal  ratio  or  such  ratio  as  may  be  provided  by 


FIGHTING      GRESHAM  S  LAW  [  49 

law."  This  was  known  as  the  "Sherman  Act."  Thus  the 
dangers  of  silver  paper  inflation  were  doubled. 

The  large  Treasury  surpluses  prevailing  until  well  into  the 
fiscal  year  of  1 892-1 893,  coupled  with  the  fact  that  for  the 
greater  part  of  that  time  the  balance  of  trade  ran  in  the 
favor  of  the  United  States,  prevented  any  serious  depletion 
of  the  gold  reserve  until  just  prior  to  the  panic  of  1893.  For 
about  a  year  prior  to  that  date  the  reserve  had  been  tending 
downward  and  it  was  with  the  utmost  difficulty  that  Secre- 
tary Folger  succeeded  in  maintaining  the  amount  slightly 
above  the  accepted  minimum  of  #100,000,000. 

The  second  Cleveland  administration  found  an  empty  and 
almost  bankrupt  treasury. 

Secretary  Carlisle  reported  to  Congress  on  December  19, 
1893,  that  the  actual  net  balance  in  the  Treasury  after  de- 
ducting trust  funds,  disbursing  officers'  balances  and  the  gold 
reserve  was  only  #11,038,448  and  that  of  the  total  amount 
held  $12,347,517  was  in  subsidiary  silver  and  minor  coins. 
The  surplus  had  been  effectually  dissipated  by  the  Harrison 
administration. 

It  is  no  wonder  that  the  credit  of  the  Government  was  at  low 
ebb.  President  Cleveland  and  his  Congress  were  entirely  out 
of  accord  on  the  currency  question.  Congress  was  persuaded 
to  repeal  the  silver  purchase  act,  but  more  than  this  it  would 
not  do,  although  the  Secretary  pointed  out  that  notwith- 
standing extraordinary  efforts  to  maintain  the  reserve  it  was 
persistently  declining.  By  January,  1894  the  reserve  was 
down  to  $69,747,000. 

By  taking  advantage  of  an  old  law  upon  the  statute  books 
the  Secretary  was  able  to  find  authority  to  issue  bonds  to 
replenish  the  Treasury  and  to  maintain  the  reserve.  Fifty 
million  dollars  of  5%  bonds  were  sold  at  117.223% — equal 


50]  bankers  trust  company 

to  a  3%  bond  at  par.  Even  though  some  members  of  Con- 
gress tried  to  prevent  the  issue  of  these  bonds  by  questioning 
their  legality,  they  were  successfully  sold,  but  only  after  the 
Secretary  had  put  his  pride  in  his  pocket  and  personally 
asked  the  bankers  to  get  together  and  take  #43,000,000  of 
them,  $7,000,000  being  all  for  which  the  general  public  had 
subscribed.  The  reserve  was  made  good  for  a  few  months 
but  by  August  it  had  again  fallen,  this  time  to  $52,189,000. 

Although  the  balance  of  trade  was  largely  in  our  favor, 
gold  was  going  out  of  the  country  rapidly.  Foreigners  were 
withdrawing  their  investments.  The  Secretary  obtained 
$15,000,000  in  gold  from  the  banks  in  exchange  for  legal 
tender  notes.  This  helped  very  little,  so  in  November  another 
$50,000,000  5%  bonds  were  placed  in  exchange  for  gold  coin, 
again  with  the  banks  of  New  York  City.  This  gold  dis- 
appeared as  quickly  as  the  previous  instalment,  so  that  by 
February  the  reserve  dropped  to  $40,000,000.  It  was  com- 
monly expected  that  the  Treasury  would  suspend  in  a  few 
days. 

Just  at  this  juncture  the  President  succeeded  in  arranging 
with  a  group  of  American  and  foreign  bankers,  headed  by 
J.  P.  Morgan  &  Co.,  to  provide  the  Treasury  with  3,500,000 
ounces  of  gold  coin,  equal  to  $65,117,000,  in  exchange  for  4% 
bonds  maturing  in  1925.  This  was  equivalent  to  a  sale  of  the 
bonds  at  104.49%,  a  3^4%  basis  of  income. 

In  connection  with  the  previous  sales  there  had  been  a 
lack  of  a  nice  sense  of  business  ethics  on  the  part  of  some 
of  the  banks,  for  they  had  withdrawn  gold  from  the  Treasury 
to  the  extent  of  $24,000,000  in  order  to  complete  their  pay- 
ments. The  Morgan  syndicate  agreed  that  they  would  exert 
all  financial  influence  and  make  all  legitimate  effort  to  protect 
the  Treasury  of  the  United  States  against  the  withdrawals  of 


FIGHTING  "GRESHAM'S  LAW"  [  51 

gold  pending  the  complete  performance  of  the  contract.  The 
bond  deliveries  were  to  be  made  pari  passu  with  the  pay- 
ments. The  terms  of  the  contract  allowed  six  months  for  its 
performance.  This  meant  that  the  Treasury  had  the  support 
of  the  syndicate  for  that  period  of  time. 

The  bond  syndicate  succeeded  in  protecting  the  Treasury 
during  the  term  of  their  contract  and  they  even  contributed 
$20,000,000  more  in  gold  in  exchange  for  legal  tender  notes, 
after  their  contract  had  expired. 

There  were  no  further  large  withdrawals  of  gold  until  after 
President  Cleveland  sent  to  Congress  his  Venezuelan  message 
in  December,  1895.  By  the  6th  of  January  following,  the 
reserve  was  down  to  $61,251,000.  It  was  therefore  deemed 
advisable  to  sell  another  $100,000,000  4s  of  1925.  These 
were  offered  for  public  subscription  at  11 1.166%. 

As  Horace  White  said  in  an  address  delivered  at  Omaha 
before  the  National  Currency  Convention  in  April,  1898: — 
"if  the  trouble  had  been  merely  a  shortage  of  revenue,  Con- 
gress would  have  applied  the  remedy  promptly.  It  was 
precisely  because  the  currency  question,  and  the  standard 
of  value,  and  party  interests  were  involved  in  it  that  the 
members  of  Congress  would  do  nothing  except  embarrass  the 
Executive,  bandy  words  with  each  other,  and  let  the  Treas- 
ury go  to  smash." 

The  fight  for  the  integrity  of  the  currency  and  for  the 
preservation  of  the  credit  of  the  Government  was  won.  The 
bonds  which  were  issued  were  in  amount  more  than  sufficient, 
if  they  had  been  so  applied,  to  retire  every  dollar  of  the  green- 
backs and  yet  they  are  still  outstanding  and  $118,489,900  of 
the  Fours  of  1925  issued  in  1895  are  still  drawing  interest 
from  present-day  taxpayers. 

In  1897  President  Cleveland,  after  courageously  holding 


52  ]  BANKERS  TRUST  COMPANY 

the  situation  for  four  years  against  a  soft-money  Congress, 
surrendered  the  reins  of  office  to  President  McKinley  who 
with  his  Congress  was  elected  on  a  sound-money  platform. 
The  country  had  had  its  fill  of  the  soft-money  shibboleth. 

To  complete  the  record  it  may  be  noted  that  in  1900  Con- 
gress clearly  defined  the  policy  of  the  country  in  regard  to 
the  currency  for  all  future  time  by  passing  what  may  be 
called  the  new  "public  credit  act."  This  act  unequivocally 
and  irretrievably  commits  the  country  to  the  payment  of  all 
forms  of  Government  paper  in  gold  coin  or  its  equivalent. 


Chapter  IX 
The  Spanish   War 

AT  the  time  of  the  declaration  of  war  with  Spain  the 
finances  of  the  Government  were  in  excellent  condition 
and  the  taxing  machinery  was  in  good  working  operation. 
Congress  for  the  first  time  planned  for  war  expenses  on  a 
really  scientific  basis  by  providing  for  an  adequate  scheme  of 
taxation  in  connection  with  an  issue  of  bonds.  As  far  as 
taxes  were  concerned,  reliance  was  placed  almost  wholly 
upon  new  internal  revenue  duties.  For  the  first  time  a 
Federal  tax  was  laid  on  legacies.  An  issue  of  #200,000,000 
3  %  ten-twenty  year  bonds  was  authorized.  These  bonds  were 
sold  at  par  and  almost  immediately  thereafter  were  quoted 
at  a  premium. 

Upon  the  cessation  of  the  war  with  Spain  the  Government 
found  itself  embarrassed  by  large  surplus  revenues  and  the 
process  of  debt  paying  began  again.  As  there  were  no  bonds 
subject  to  call,  it  was  necessary  for  the  Secretary  of  the 
Treasury  to  endeavor  to  buy  bonds.  He  therefore  in  Novem- 
ber, 1899,  offered  to  purchase  #25,000,000  4s  of  1907  or  5s 
of  1904,  but  succeeded  in  obtaining  something  less  than 
$20,000,000  bonds. 

The  Two  Per  Cent  Consols 

In  1900,  upon  the  advice  of  Secretary  Gage,  Congress 
passed  an  act  providing  for  the  refunding  of  the  Threes,  the 

(53 


54]  BANKERS  TRUST  COMPANY 

Fours  of  1907,  and  the  Fives,  into  new  2%  thirty-year  gold 
bonds.  This  was  the  first  issue  of  bonds  to  be  specifically 
made  payable  in  gold  coin.  This  refunding  operation  was  a 
brilliant  success,  rivaling  the  achievement  of  Secretary  Win- 
dom  in  "continuing"  in  1882  the  maturing  5%  and  6% 
bonds  at  three  and  one-half  per  cent,  as  already  described. 
All  told  there  were  some  $900,000,000  bonds  which  were 
convertible  under  the  law.  Of  this  amount  $445,900,000 
bonds  were  converted  up  to  January  1,  1901,  at  which  time 
the  Secretary  of  the  Treasury,  acting  under  the  authority 
theretofore  given  him  by  Congress,  declined  to  permit  further 
exchanges,  desiring  to  reserve  the  remainder  of  the  bonds 
maturing  in  1904,  1907  and  1908  for  the  requirements  of  the 
sinking  fund. 

However,  in  1903,  refunding  operations  were  resumed  and 
about  $97,000,000  more  bonds  converted.  In  1905,  some 
$53 ,000,000  bonds  were  converted,  and  upwards  of  $50,000,000 
in  1907.  The  total  conversions  amounted  to  $646,250,150  at 
an  estimated  net  saving  to  the  Government  on  interest  ac- 
count of  $16,551,037. 

The  Panama  Canal 

By  the  Act  of  June  28, 1902,  and  the  Act  of  August  5, 1909, 
Congress  authorized  the  issuance  of  2%  and  3%  bonds  for 
an  amount  not  to  exceed  $375,200,980  to  reimburse  the 
Treasury  for  expenditures  incurred  and  to  be  incurred  in  the 
construction  of  the  Panama  Canal. 

Under  these  acts  $84,631,980  bonds  were  issued  bearing 
2%  interest  and  $50,000,000  bonds  were  issued  bearing  3% 
interest.  The  total  cost  of  the  Canal  up  to  June  30,  1918,  was 
$439,809,601.  By  the  Act  of  September  24,  1917,  as  amended, 
Congress  authorized  an  issue  of  $225,000,000  bonds  in  lieu  of 


THE  SPANISH  WAR  [55 

the  unissued  Panama  Canal  bonds,  and  this  amount  was  in- 
cluded in  the  general  authority  for  the  issue  of  Liberty  bonds. 

There  were  no  other  important  transactions  in  connection 
with  the  history  of  the  public  debt  until  the  time  came  for 
the  active  participation  of  the  country  in  the  world  war  just 
ended. 

It  may  be  noted,  for  the  sake  of  the  record,  that  in  1910 
provision  was  made  for  funding  postal  savings  deposits  into 
2^2%  Postal-Savings  bonds.  These  bonds  are  described  on  a 
subsequent  page. 

In  the  legislation  authorizing  the  Federal  Reserve  System 
provision  was  made  for  gradually  refunding  the  Two  per  cent. 
Consols  and  the  Panama  Canal  Twos,  most  of  which  are  held 
by  the  national  banks,  into  bonds  and  certificates  without  the 
circulation  privilege  bearing  three  per  cent,  interest.  No  im- 
portant transactions  have  as  yet  taken  place  as  a  result  of 
this  legislation.  In  justice  to  the  national  banks,  in  view  of 
the  entirely  new  conditions  brought  about  by  the  present  war, 
some  further  remedial  legislation  will  probably  be  required  in 
connection  with  these  bonds. 

On  April  1st,  1917,  the  net  public  debt  of  the  United  States 
was  $1,207,827,886,  a  per  capita  debt  of  $11.59,  and  a  net 
reduction  from  the  maximum  at  the  close  of  the  Civil  War 
of  $1,548,603,685. 


Chapter  X 
The  Great  War 

IF  an  able  finance  minister,  foreseeing  the  outbreak  of  a 
great  war  in  which  the  country  might  be  involved,  had 
made  thorough  plans  to  cope  with  the  problems  which  such 
a  war  must  bring,  he  could  not  have  adopted  better  financial 
measures  than  those  which  by  a  process  of  evolution  were 
actually  in  force  on  the  fateful  August  4,  1914. 

The  Federal  Reserve  System,  co-ordinating  the  banking 
resources  of  the  country  and  stabilizing  the  currency,  had  just 
gone  into  operation,  corporation  taxes  had  become  a  feature 
of  our  fiscal  system  since  1910,  the  income  tax  had  been  ap- 
proved in  principle  and  actual  collections  of  revenue  there- 
from had  begun. 

Therefore  when  in  1917  war  became  inevitable  it  was  only 
necessary  to  speed  up  actually  existing  fiscal  machinery.  No 
time  was  lost  in  devising  entirely  new  methods  of  taxation. 
There  was  no  necessity  or  excuse,  as  there  had  been  at  the 
outbreak  of  the  Civil  War,  for  questionable  currency  methods 
because  the  existing  system  was  impossible.  It  was  unneces- 
sary to  beg  the  banks  reluctantly  to  make  wholly  inadequate 
preliminary  advances,  as  Secretary  Chase  had  been  com- 
pelled to  do. 

With  the  experience  of  the  past  as  a  guide,  it  was  possible 
to  devise  a  simple,  scientific  method  of  borrowing,  a  method 
which  quickly  gave  the  Government  the  moneys  required  by 
56] 


THE  GREAT  WAR  [  57 


the  use  of  one  kind  of  paper,  and  then  funded  these  advances 
into  bonds  bearing  a  moderate  rate  of  interest  and  so  adjusted 
as  to  maturity  dates  as  to  permit  of  refunding  at  lower  rates, 
or  of  repayment  as  soon  as  conditions  would  allow,  without 
the  necessity  of  going  into  the  market  and  paying  large 
premiums. 

A  distinguishing  feature  of  the  financing  of  the  present  war 
has  been  the  emphasis  which  has  been  put  upon  thrift.  The 
doctrine  of  conservation  of  "goods  and  services"  has  been 
preached  from  one  end  of  the  land  to  the  other.  The  effort 
has  been  to  obtain  the  resources  for  the  conduct  of  the  war 
without  placing  an  undue  strain  upon  the  banking  facilities 
of  the  country.  This  effort  has  succeeded  to  a  remarkable 
degree. 

The  indications  are  that  by  the  end  of  the  present  fiscal 
year  the  disbursements  of  the  Government  for  the  expenses 
of  the  war  will  have  reached  upwards  of  thirty  billion  dollars 
and  that  of  this  great  amount  about  20%  will  have  been  raised 
from  taxation,  besides  raising  from  taxation  an  additional 
$2,000,000,000  to  cover  the  normal  budget.  Of  the  remaining 
80%  of  the  war  expenditure,  assuming  the  undoubted  success 
of  the  Victory  Loan,  substantially  all  should  be  in  funded 
form  and  it  may  reasonably  be  expected  that  the  greater  part 
of  this  amount  will  be  fully  paid  for  and  put  away  in  the  safe 
keeping  boxes  of  some  twenty  million  or  more  citizens  of  our 
great  republic. 

The  method  of  public  debt  financing  which  the  Treasury 
has  so  successfully  used  since  our  active  participation  in 
the  war  began  in  April,  191 7,  may  be  briefly  described  as 
follows.  In  anticipation  of  the  receipt  of  the  proceeds  of 
Liberty  Loans  the  Treasury  has  issued  Certificates  of  In- 
debtedness.  These  certificates  have  first  been  apportioned  to 


58  ]  BANKERS  TRUST  COMPANY 

the  twelve  Federal  Reserve  districts  and  then  to  the  banks  in 
each  district  in  the  ratio  which  the  assets  of  each  group  and  of 
each  bank  in  a  group  bore  respectively  to  the  entire  banking 
assets  of  the  country  and  of  the  group.  While  it  has  not  been 
compulsory  upon  each  bank  to  accept  its  allotment,  yet  as  a 
rule  the  banks  have  cheerfully  accepted  the  proportion  al- 
lotted them. 

These  certificates  have  borne  rates  of  interest  varying 
from  3%  to  4^%,  but  for  some  months  past  4^%  has  been 
the  accepted  rate. 

The  certificates  have  been  issued  from  time  to  time  as  the 
exigencies  of  the  Treasury  required.  Then,  when  the  time 
seemed  suitable  for  the  issuance  of  a  permanent  loan,  the 
advances  of  the  banks  have  been  repaid  from  the  proceeds 
of  such  loan. 

The  reports  of  the  Treasury  Department  show  that  #868, 
205,000  certificates  were  issued  in  anticipation  of  the  first 
loan;  #2,320,493,000  in  anticipation  of  the  second  loan; 
$3,012,085,500  in  anticipation  of  the  third  loan  and  $4,659,- 
820,000  in  anticipation  of  the  fourth  loan.  The  amount  of 
certificates  which  will  have  been  issued  in  anticipation  of  the 
Victory  Liberty  Loan  up  to  April  21st  will  probably  be  about 
$5,000,000,000. 

It  will  be  noted  that  the  Treasury  by  certificate  issues 
anticipated  the  income  from  the  first  loan  by  43.41%,  from 
the  second  by  60.92%,  from  the  third  by  72.12%  and  from  the 
fourth  by  66.63%. 

Another  class  of  certificates  which  the  Treasury  has  issued 
has  been  made  in  anticipation  of  the  revenue  from  internal 
revenue  taxes.  In  addition  there  have  been  some  issues  to 
tide  over  special  emergencies.  These  special  emergency  certif- 
icates have  carried  only  a  nominal  2%  interest. 


THE  GREAT  WAR  [  59 


The  success  of  the  permanent,  or  Liberty  Bond,  financing  is 
a  matter  of  common  record.  The  grand  total  of  the  four  loans 
issued  was  $16,978,356,250.  According  to  official  estimates, 
these  bonds  have  been  distributed  among  upwards  of  twenty 
million  subscribers.  Then  there  have  been  the  sales  of  War 
Savings  and  Thrift  Stamps  aggregating  well  over  a  billion 
dollars. 

The  permanent  addition  to  the  public  debt  because  of  the 
late  war,  after  the  Victory  Loan  financing  has  been  com- 
pleted, will  probably  closely  approximate  $25,000,000,000,  and 
while  it  is  not  expected  that  there  will  be  necessity  for  any 
more  Liberty  Bond  campaigns,  it  is  quite  likely  that  the 
Treasury  may  need  to  borrow  from  the  banks  toward  the  end 
of  the  year  and  during  1920  some  further  substantial  amounts 
before  the  maximum  is  reached. 

It  should  be  carefully  borne  in  mind  that  against  this  great 
increase  of  debt  the  Treasury  will  hold  some  $10,000,000,000 
of  interest-bearing  bonds  of  foreign  nations,  most,  if  not  all, 
of  which  will  eventually  be  paid.  However,  the  actual  net 
war  burden  which  the  American  people  will  have  to  liquidate 
will  be  between  fifteen  and  twenty  billion  dollars,  or  from  $140 
to  $187  per  capita.  At  the  close  of  the  Civil  War  the  per 
capita  burden  was  over  $79. 

Considering  the  development  in  the  resources  of  the  nation 
which  has  taken  place  since  1865,  the  burden  of  debt  ought 
not  to  be  more  difficult  to  cope  with  now  than  it  was  in  that 
instance. 

The  traditional  dislike  of  the  nation  to  being  in  debt  and 
the  rapid  progress  made  in  debt  reduction  after  every  other 
great  crisis  in  the  history  of  the  country  will  undoubtedly 
characterize  the  course  of  events  following  the  present  crisis. 

It  looks  very  much  as  if  history  would  repeat  itself  and 


60]  BANKERS  TRUST  COMPANY 

taxes  flow  into  the  Treasury  in  such  volume  as  to  permit  of 
an  early  resumption  of  debt  paying. 

Those  who  have  bought  bonds  from  patriotic  motives  will 
unquestionably  be  rewarded  for  so  doing  in  hard  dollars  and 
cents  profits,  should  they  wish  to  realize  upon  their  bonds 
prior  to  maturity.  The  present  market  return  of  nearly  five 
per  cent  from  an  investment  in  United  States  Liberty  Bonds 
will  fade  away  as  did  the  big  returns  from  similar  investments 
after  the  Civil  War.  After  that  war  73Ao%  gave  away  to  6%, 
then  to  5%,  4^2%,  4%.  No  sooner  was  the  debt  upon  a 
f6ur  per  cent  basis  than  the  market  rate  became  3^%>  then 
3%  and  finally  before  the  turn  came  the  Government  credit 
rose  to  a  two  per  cent  basis.  Patriotism  was  certainly  wonder- 
fully rewarded.  The  same  relative  enhancement  in  market 
value  and  of  rapid  debt  reduction  happened  following  the 
funding  of  the  Revolutionary  Debt,  after  the  War  of  1 8 1 2  and 
after  the  Mexican  War. 

It  will  not  be  many  years  before  the  United  States  will  be 
again  out  of  debt  and  in  the  interval  the  fortunate  holders  of 
the  country's  bonds  will  reap  a  bountiful  harvest.  This  time, 
it  is  a  pleasure  to  know  that  those  to  be  benefited  will  be  the 
people  at  large,  for  there  is  scarcely  a  family  to-day  which  does 
not  own  at  least  one  Liberty  Bond. 

The  people  of  the  United  States  may  well  be  proud  of  the 
debt  paying  record  of  their  Government.  While  assisted  by 
the  fact  of  the  great  resources  of  a  new  country,  the  achieve- 
ments of  the  past  would  not  have  been  possible  had  not  the 
financial  foundation  been  well  laid  in  the  beginning  of  our 
history  and  a  strong  sense  of  public  honor  ever  afterward 
maintained. 

Mistakes,  many  of  them  of  a  serious  nature,  have  been 
made  in  the  gradual  evolution  of  our  financial  system,  but, 


THE  GREAT  WAR  [  6l 


learning  by  our  mistakes,  we  have  finally  developed  a  fiscal 
system  which  while  not  yet  perfect  has  shown  its  ability  to 
carry  the  nation  safely  and  comfortably  through  the  strain 
of  the  greatest  war  in  history. 

We  can  well  be  proud  of  the  achievements  of  the  past  and 
look  forward  confidently  to  a  future  which  may  be  expected 
to  bring  with  it  equally  great  achievements.  Let  us  hope 
that  the  resort  to  the  use  of  the  public  credit  in  the  future 
may  not  again  be  required  for  the  conduct  of  war,  but,  if  at 
all,  for  the  development  of  conditions  which  will  make  life 
better  worth  living  and  for  the  maintenance  of  a  just  and  per- 
manent peace  among  the  peoples  of  the  earth. 


Part  II — Descriptive 

Chapter  I 
Some  Comparative  Data 

PRIOR  to  the  war  the  debt  of  the  United  States  amounted 
in  round  figures  to  $1,000,000,000.  Since  the  begin- 
ning of  the  war  the  debt  has  increased  in  the  sum  of  about 
$23,000,000,000,  so  that  the  debt  to-day  is  about  twenty-four 
times  the  amount  at  which  it  stood  before  we  began  to  take 
an  active  part  in  the  world  war  about  two  years  ago.  We  may 
assume,  when  adjustments  and  settlements  have  all  been 
made,  that  the  maximum  debt  for  the  present  war  may  reach 
about  $30,000,000,000.  However,  against  this  total  should  be 
placed  an  asset  of  around  ten  billion  dollars  of  interest-bear- 
ing obligations  of  foreign  governments  representing  some 
eight  and  a  half  billion  of  loans  made  to  our  Allies  during  the 
progress  of  the  war,  together  with  another  contemplated 
billion  and  a  half  of  similar  loans.  It  may  be  expected  that  in 
the  process  of  time  these  loans  will  be  repaid  and,  as  the  law 
under  which  they  were  made  expressly  stipulates  that  repay- 
ments shall  be  applied  to  the  liquidation  of  a  corresponding 
amount  of  national  indebtedness,  we  may  expect  eventually 
that  this  large  portion  of  our  indebtedness  will  be  paid  with- 
out it  being  necessary  to  call  upon  the  tax  payers  for  a  con- 
tribution in  any  form  either  on  account  of  principal  or  interest. 
62] 


SOME  COMPARATIVE  DATA  [  63 

The  Debt  at  Former  Critical  Periods 

The  other  periods  in  the  history  of  the  country  at  which 
the  debt  stood  at  a  maximum  amount  were  on  August  31, 
1865,  shortly  after  the  close  of  the  Civil  War,  when  the  total 
debt  was  $2,844,649,616;  in  1851,  after  the  Mexican  War  and 
the  payment  of  the  Texas  indemnity,  when  it  amounted  to 
$68,304,796;  on  December  31,  181 5,  when  all  the  bills  for 
the  War  of  1812  had  been  settled,  when  it  was  $127,041,341, 
and  on  April  1,  1791,  for  which  date,  after  all  adjustments  of 
the  Revolutionary  debts  had  been  made,  the  debt  was  found 
to  be  $76,781,953. 

Reduced  to  a  per  capita  basis  the  Revolutionary  War  debt 
amounted  to  $18.88;  that  after  the  War  of  1812  to  $14.64; 
that  at  the  close  of  the  Mexican  War  to  $2.84;  that  at  the 
close  of  the  Civil  War  to  $81.58,  while  at  present  it  is  $224.30 
and,  if  the  estimated  maximum  for  the  late  war  is  reached, 
will  be  about  $280. 

The  Debt  and  the  National  Wealth 

The  national  wealth  of  the  United  States  to-day  is  some- 
where around  three  hundred  billion  dollars,  so  that  the  pres- 
ent debt  is  about  eight  per  cent,  of  the  wealth  of  the  country 
and  if  it  reaches  its  estimated  maximum  will  be  about  ten 
per  cent,  of  the  national  wealth. 

The  Sinking  Fund  Will  Retire  Debt  in 
Twenty-Five  Years 

In  order  to  retire  the  principal  of  the  debt  incurred  in  the 
prosecution  of  the  war,  Congress  has  made  an  appropriation 
for  an  annual  sinking  fund,  beginning  in  1920,  equal  to  the 


64  ]  BANKERS  TRUST  COMPANY 

sum  of  (1)  2^2  per  cent,  of  the  aggregate  amount  of  bonds 
and  notes  issued  under  any  of  the  Liberty  Bond  Acts,  less 
an  amount  equal  to  the  par  amount  of  any  obligations  of 
foreign  governments  held  by  the  United  States  on  July  1, 
1920,  plus  (2)  the  interest  which  would  have  been  payable 
upon  the  bonds  and  notes  held  in  the  sinking  fund.  The 
period  required  to  liquidate  the  debt  by  this  arrangement  is 
estimated  at  twenty-five  years.  The  specific  appropriation 
called  for  by  this  act,  in  addition  to  that  for  the  interest 
charge,  will  be  in  the  neighborhood  of  #500,000,000. 

The  Interest  Charge  and  the  National  Income 

The  national  income  of  the  United  States  at  this  time  may 
be  conservatively  estimated  at  over  sixty  billion  dollars.  To 
meet  the  present  interest  charge  of  approximately  one  billion 
dollars  calls  for  about  #1.66  from  each  $100  of  income  and  to 
meet  the  estimated  maximum  interest  charge  for  thirty  billion 
of  debt,  say  #1,250,000,000,  would  require  about  #2.00  out  of 
every  #100  of  income. 

The  gross  interest  and  sinking  fund  charge  would  thus  be 
#1,750,000,000, — #16.37  per  capita;  about  #3  out  of  every 
#100  of  national  income.  Assuming,  however,  that  the  inter- 
est on  an  amount  of  debt  equivalent  to  the  loans  to  foreign 
governments  will  be  met  by  the  payments  from  such  govern- 
ments and  that  the  principal  of  an  amount  of  debt  equal  to 
such  loans  will  be  finally  liquidated  by  the  payment  thereof, 
then  the  actual  charge  against  the  American  people  for  the 
payment  of  interest  and  the  liquidation  of  debt  within  twenty- 
five  years  will  be  only  #1,300,000,000  a  year; — a  per  capita 
charge  of  #12.15  or  saY  $2-l7  f°r  every  #100  of  national 
income. 


SOME  COMPARATIVE  DATA  [  65 

The  Debt  Compared  With  Debts  of  Other  Nations 

It  will  now  be  interesting  to  note  how  the  debts  and  re- 
sources of  the  other  great  nations  of  the  world  compare  with 
those  of  the  United  States.  According  to  the  latest  statistics 
available,  the  national  debt  of  Great  Britain  now  amounts  to 
over  $36,000,000,000  of  which  approximately  $33,000,000,000 
has  been  incurred  since  the  beginning  of  the  war  on  August 
4,  1914.  On  a  per  capita  basis  the  debt  would  amount  to, 
say,  $782.60.  The  national  wealth  of  Great  Britain  is  esti- 
mated by  competent  authorities  at  $120,000,000,000  and  the 
national  income  at  $15,500,000,000.  The  proportion  of  debt 
to  wealth  therefore  would  be  30%  and,  assuming  the  interest 
charge  to  be  about  $1,575,000,000,  it  would  require  to  meet  it 
about  $10.16  out  of  every  $100  of  income.  It  should  be  noted 
here  that  it  is  estimated  Great  Britain  will  be  reimbursed  by 
her  Allies  and  Dominions  to  the  extent  of  about  $5,000,- 
000,000  for  advances  made  to  them  during  the  progress  of 
the  war.  Assuming  this  to  occur,  the  burden  of  debt  to  be 
borne  by  her  own  people  would  be  reduced  to  $674  per  capita, 
calling  for  a  contribution  of  $8.70  a  year  from  every  one 
hundred  dollars  of  income  in  order  to  meet  the  interest  charge. 

The  figures  available  for  France,  Italy  and  Germany  are 
not  as  reliable  as  those  for  Great  Britain  and  for  our  own 
country,  but  a  close  approximation  would  give  the  gross 
debt  of  France  as  about  $36,000,000,000  and  the  per  capita 
debt  $900;  the  gross  debt  of  Italy  as  about  $12,600,000,000 
and  the  per  capita  debt  $350;  the  gross  debt  of  Germany, 
$39,000,000,000,  and  the  per  capita  debt  about  $600. 

While  all  figures  for  national  wealth  and  national  income 
are  necessarily  estimates  and  of  no  great  scientific  value,  the 
accepted  figures  for  France,  Italy  and  Germany  are  especially 


66]  BANKERS  TRUST  COMPANY 

indeterminate.  However,  they  probably  roughly  approxi- 
mate the  facts  and,  with  the  above  reservation,  may  be  used 
for  comparative  purposes. 

The  national  wealth  of  France  was  estimated  before  the 
war  at  $62,000,000,000  and  the  national  income  at  perhaps 
$7,500,000,000.  The  wealth  of  Italy  prior  to  the  war  may 
be  taken  at  $25,000,000,000,  while  the  national  income  was 
perhaps  $4,500,000,000. 

For  the  German  Empire  before  the  war,  the  wealth  was 
estimated  at  upwards  of  $80,000,000,000  and  the  income  at 
around  $10,000,000,000.  An  official  estimate  of  recent  date 
gives  the  cost  of  the  war  at  161  billion  marks.  At  the  par  of 
exchange  this  is,  say,  thirty-nine  billion  dollars,  the  figure  at 
which  we  have  estimated  the  debt,  for  it  is  well  known  that 
no  part  of  Germany's  war  expenses  has  been  met  from  taxa- 
tion, not  even  all  the  interest  upon  her  debt.  The  amount 
required  for  the  interest  charge  is  probably  about  two  billion 
dollars.  As  the  statistics  for  wealth  and  income  so  far  given 
for  these  countries  are  in  the  terms  of  the  pre-war  money 
status,  we  really  ought  to  advance  the  valuations  materially 
in  order  to  adjust  them  to  the  same  basis  of  inflated  values 
as  that  upon  which  the  debts  have  been  incurred. 

Just  what  adjustments  should  be  made  it  is  difficult  to 
determine.  In  the  case  of  our  own  country  the  estimate  of 
national  income  which  we  have  used  is  based  on  present-day 
conditions  and  we  believe  closely  approximates  the  real  facts. 
The  usual  estimate  of  national  wealth  of  $250,000,000,000  we 
believe  to  be  too  low.  A  ratio  of  20%  of  income  to  wealth 
would  undoubtedly  more  nearly  reflect  the  true  status.  This 
would  make  the  national  wealth  in  present-day  values 
$300,000,000,000,  the  figure  which  we  have  adopted. 

The  figures  used  for  Great  Britain  are  estimates  recently 


SOME  COMPARATIVE  DATA 


[67 


published  by  Edgar  Crammond,  a  noted  English  writer  on 
economic  topics. 

Corresponding  adjustments  for  the  wealth  and  income  of 
the  Continental  nations  with  which  we  are  making  compari- 
sons enable  us  to  arrive  at  the  results  given  in  the  following 
tables. 

These  adjustments  have  not  been  made  arbitrarily.  In 
each  case  conditions  peculiar  to  each  nation  have  been  care- 
fully considered.  We  have  not  overlooked  the  losses  which 
each  of  these  nations  has  suffered  as  a  result  of  the  conflict 
from  which  they  are  emerging. 

In  the  case  of  France  we  have  considered  the  losses  due  to 
the  war,  but  against  these  we  have  thought  it  fair  to  place  a 
liberal  estimate  for  the  wealth  and  income  of  Alsace-Lorraine 
now  again  to  be  incorporated  in  the  nation.  A  corresponding 
reduction  has  been  made  in  considering  the  population, 
wealth  and  income  of  Germany. 

With  these  prefatory  remarks  the  tables  are  submitted. 
They  will  repay  careful  study. 

DEBT  AND  INTEREST  CHARGE  COMPARED  WITH  ESTIMATED  WEALTH  AND 
INCOME  OF  THE  PRINCIPAL  BELLIGERENTS  IN  THE  LATE  WAR 

Approximate  status  as  of  April  1,  1919 


Nation 


United  States 
Great  Britain 
France.    .    . 
Italy     .    .    . 
Germany 


Debt 

Debt 

Wealth 

% 
Wealth 

Interest 

Income 

$24 

$300 

8.00 

$1,000 

$60.0 

36 

120 

30.00 

1.575 

15.5 

36 

90 

40.00 

1.800 

12.0 

12.6 

40 

31.50 

.548 

7.5 

39 

80 

48.75 

1.950 

10.0 

Interest 

% 
Income 


1.66 
10.16 
15.00 

7.30 
19.50 


(Debt,  wealth,  interest  and  income  in  billions.) 


68 


BANKERS  TRUST  COMPANY 


DEBTS  AND  INTEREST  CHARGE  COMPARED  WITH  ESTIMATED  WEALTH  AND 

INCOME  OF  THE  PRINCIPAL  BELLIGERENTS  IN  THE  LATE  WAR 

PER  CAPITA  BASIS 


Population 
(In 

millions) 


107 
46 
40 
36 
65 


Nation 


United  States 
Great  Britain 
France .    .    . 
Italy     .    .    . 
Germany .   . 


Debt 

Per 

Capita 


$224. 
782. 
900. 
350. 
600. 


Wealth 
Per 

Capita 


$2803. 
2608. 
2250. 
1111. 
1231. 


Interest 

Per 
Capita 


$9.34 
34.24 
45.00 
15.22 
30.00 


Income 

Per 
Capita 


$560, 
337. 
300. 
208, 
154. 


A  quick  survey  of  the  above  figures  develops  the  fact  that 
our  debt,  and  the  interest  charge  which  it  calls  for,  in  com- 
parison with  our  population  and  resources  is  relatively  much 
smaller  than  that  of  any  other  of  the  large  nations  of  the 
world,  and  that,  if  it  had  been  necessary  to  prolong  the  war 
for  a  further  period  of  months  or  years,  we  could  have  done 
so  without  seriously  handicapping  our  industrial  develop- 
ment. It  is  gratifying  to  know  that  the  trial  to  which  we  have 
been  compelled  to  submit  for  the  purpose  of  cleansing  the 
world  from  German  autocracy  has  left  us  in  a  position  where 
we  are  strong  financially  and  able  to  do  most  effective  work 
in  assisting  to  carry  through  a  reconstruction  program  which 
will  make  the  world  finer  and  better  than  it  was  at  the 
beginning  of  the  conflict. 


Chapter   II 
General  Information 

FOR  convenience  we  will  divide  the  debt  of  the  United 
States  as  it  stands  to-day  into  two  parts,  namely,  that 
which  was  incurred  prior  to  April  ist,  1917,  which  we  will 
designate  as  the  Old  Debt,  and  that  which  was  incurred  sub- 
sequent to  that  date,  which  we  will  call  the  War  Debt. 

Payable  in  Gold  Coin 

All  the  outstanding  bonds  of  the  United  States  are  by 
express  statute  under  which  the  loans  were  made,  or  because 
of  the  general  legislation  covering  the  subject,  payable  in 
gold  coin  of  the  present  standard  of  weight  and  fineness. 

Market  Transactions 

All  United  States  bonds  are  listed  on  the  New  York  Stock 
Exchange.  None  of  the  certificates  is  so  listed.  The  trans- 
actions in  Liberty  Bonds  on  the  Exchange  are  in  large  vol- 
ume. They  are  made  at  so  many  dollars  and  tenths  of  a 
dollar  per  #100.  Liberty  Bonds  can  also  be  bought  and  sold 
over  the  counter  at  current  market  prices  in  the  bond  depart- 
ments of  trust  companies  and  banks,  and  of  other  large 
dealers. 

Very  few  transactions  take  place  on  the  Stock  Exchange 
in  the  bonds  of  the  old  issues.  The  important  transactions 
in  these  bonds  invariably  take  place  in  the  dealers'  offices. 

[69 


70  J  BANKERS  TRUST  COMPANY 

The  quotations  of  these  bonds  are  made  in  dollars  and  six- 
teenths of  a  dollar.  Transactions  are  nearly  always  made  at 
a  net  price  and  not  on  a  commission  basis. 

The  Certificates  of  Indebtedness  in  most  cases  have  been 
placed  directly  with  the  banks  through  the  Federal  reserve 
banks  and  subsequent  transactions  have  been  between  the 
banks  and  their  clients. 

The  War  Savings  Certificates  are  not  intended  to  be  bought 
and  sold  in  the  market.  It  is  the  desire  of  the  Treasury 
Department  that  they  shall  be  sold  directly  to  the  investor 
by  the  Government  agents.  In  case  the  holders  find  it  neces- 
sary to  realize  upon  them,  they  can  cash  the  certificates  at  a 
money-order  post-office.  The  same  plan  has  been  adopted 
in  connection  with  Postal-Savings  bonds  which  the  Postal 
Savings  Trustees  stand  ready  to  redeem  at  par  through  the 
post-offices. 


T 


Chapter  III 

The  Old  Debt 

HE  obligations  which  we  have  designated  as  the  Old  Debt 
may  be  classified  under  two  heads. 


Circulation  Bonds 

One  group  of  these  bonds  is  distinguished  from  the  other 
because  of  the  fact  that  the  bonds  in  this  group  have  what  is 
known  as  the  circulation  privilege,  that  is  to  say  they  can  be 
used  by  the  national  banks  and  Federal  reserve  banks  to  secure 
national  bank  notes  and  Federal  reserve  bank  notes.  The  bonds 
of  this  group,  some  of  them  bearing  interest  as  low  as  two  per 
cent,  per  annum,  are  quoted  only  a  little  below  par,  notwith- 
standing the  high  rates  of  interest  which  have  prevailed  during 
the  war  period.  This  is  due  to  the  fact  that  out  of  the  total  issue 
of  these  bonds  nearly  80%  is  deposited  with  the  Treasurer  of 
the  United  States  to  secure  bank  notes.  At  the  date  of  the 
latest  financial  statement  of  the  Treasury  Department,  that 
for  October  31,  1918,  there  were  outstanding  $883,360,790  of 
the  Old  Debt  bonds.  Of  these  $118,489,900  were  4%  bonds, 
$78,894,500  were  3%  bonds,  $11,350,760  were  2~jA%  Postal- 
Savings  bonds  and  $674,625,630  were  2%  bonds.  The  Fours  and 
Twos,  aggregating  $793,115,530,  are  available  to  secure  cir- 
culating notes.  The  4%  bonds  are  redeemable  on  and  after 
February  1st,  1925. 

[71 


yi]  BANKERS  TRUST  COMPANY 

Conversion  Bonds 

By  the  terms  of  the  Federal  Reserve  Act  provision  is  made 
for  converting  the  2%  bonds  into  what  are  known  as  Con- 
version 3%  Bonds  and  One  Year  3%  Treasury  Notes.  The 
Act  provides  that  after  December  23rd,  1915,  and  at  any 
time  during  the  period  of  twenty  years  thereafter,  the  Federal 
reserve  banks,  if  required  to  do  so  by  the  Federal  Reserve  Board, 
must  buy  from  national  banks  desiring  to  retire  their  cir- 
culating notes  the  bonds  deposited  with  the  Treasurer  of  the 
United  States  to  secure  these  notes,  but  such  purchases  must 
not  exceed  $25,000,000  par  value  of  bonds  each  year.  The 
object  of  this  provision  was  to  provide  for  the  gradual  retire- 
ment of  the  national  bank  notes  and  to  substitute  therefor 
Federal  reserve  notes  and  to  liquidate  the  bond  holdings  of 
the  banks  without  undue  loss.  The  advent  of  the  war  brought 
about  a  wholly  new  and  unexpected  situation  which,  in 
justice  to  the  banks,  will  probably  require  further  remedial 
legislation. 

N on- Inter  est  Bearing  Debt 

In  addition  to  the  interest-bearing  debt  there  was  out- 
standing on  October  31,  $4,437,250  of  debt  which  had  reached 
maturity  but  which  had  not  been  presented  for  payment 
and  upon  which  interest  had  ceased,  and  there  were  also 
outstanding  $346,681,016  United  States  notes  against  which 
the  Treasury  Department  held  a  gold  reserve  amounting  to 
$152,979,025.  There  were  also  outstanding  a  small  amount 
of  old  demand  notes  and  the  Treasury  charges  itself  with 
$6,844,418  fractional  currency  which  was  issued  during  the 
Civil  War  and  which  has  not  yet  come  in  for  redemption. 


THE  OLD  DEBT  [  73 


This  is  after  cancelling  from  the  statement  a  large  amount  of 
this  currency  which  was  years  ago  estimated  to  have  been 
lost  or  destroyed.  The  Treasury  also  charges  itself,  as  a  part 
of  the  non-interest-bearing  debt,  with  moneys  deposited  by 
national  banks  and  Federal  reserve  banks  for  the  purpose  of 
redeeming  their  notes  in  lieu  of  bonds  which  have  been  with- 
drawn. This  makes  the  total  old  or  non-war  debt  as  of 
October  31,  1918,  after  deducting  the  gold  reserve  held 
against  the  United  States  notes,  $1,130,943,651. 

Postal-Savings  Bonds 

The  Postal-Savings  System  was  established  by  an  Act  of 
Congress,  approved  June  25,  1910,  for  the  purpose  of  pro- 
moting and  encouraging  the  habit  of  thrift,  especially  among 
our  large  foreign  population,  to  whom  the  use  of  a  Govern- 
ment depository  for  savings  was  familiar. 

The  system  was  popular  from  the  start  and  has  served  its 
purpose  well.  Interest  at  the  rate  of  two  per  cent,  per  an- 
num is  allowed  upon  savings.  The  depositors  have  the  right 
to  convert  their  savings  into  Postal-Savings  Bonds,  bearing 
interest  at  the  rate  of  2>£%  per  annum. 

At  the  close  of  the  fiscal  year  ended  June  30,  1918,  there 
were  6,678  postal-savings  depositories  in  operation,  including 
730  branch  post-offices  and  stations.  The  amount  on  deposit 
was  $148,471,499,  belonging  to  612,188  depositors.  The 
average  deposit  was  $242.53.  The  maximum  amount  which 
any  depositor  may  have  to  his  credit  is  $2,500. 

To  encourage  small  savings  10-cent  savings  stamps  are 
sold  which  will  be  accepted  as  an  interest-bearing  deposit  in 
sums  of  one  dollar. 


74]  BANKERS  TRUST  COMPANY 

In  pursuance  of  authority  contained  in  the  Postal  Savings 
Act,  $11,350,760  Postal-Savings  Bonds  have  been  issued.  The 
first  series  was  issued  July  1,  191 1,  and  an  additional  series 
has  been  issued  January  1  and  July  1  of  each  subsequent  year. 
Postal-savings  depositors  desiring  to  convert  their  savings 
into  bonds,  must  make  application  at  least  thirty  days  before 
the  date  of  issue  of  the  bonds.  The  applications,  after  re- 
ceiving the  approval  of  the  Post  OfHce  Department,  are  for- 
warded to  the  Treasury  Department  and  at  the  same  time 
funds  for  the  amount  of  the  bonds  to  be  issued  are  deposited 
in  the  Treasury.  Thereupon  the  Treasury  Department  issues 
the  Postal-Savings  Bonds,  which  are  United  States  bonds  and 
a  direct  obligation  of  the  Government.  The  bonds  bear  in- 
terest at  the  rate  of  2^%  per  annum  payable  semi-annually 
on  January  1  and  July  1  of  each  year;  both  principal  and  in- 
terest are  payable  in  United  States  gold  coin  of  the  present 
standard  of  value;  they  are  redeemable  after  one  year  from 
date  of  issue  and  are  payable  20  years  from  such  date;  they 
are  not  receivable  as  security  for  national  bank  or  Federal 
reserve  bank  circulation.  They  are  issued  in  coupon  and 
registered  form,  and  in  denominations  of  $20,  $100,  and  $500. 

The  Trustees  of  the  Postal-Savings  Service  stand  ready  at 
any  time  to  repurchase  these  bonds  at  par  as  an  investment 
for  Postal-Savings  funds.  The  amount  of  bonds  so  purchased 
by  the  Postal-Savings  Service  and  held  as  an  investment  on 
June  30,  1918,  was  $3,963,440.  These  bonds  may  therefore 
be  held  free  from  the  risk  of  fluctuation  in  market  value.  This 
is  a  compensation  for  the  low  rate  of  interest  which  they  bear. 


Chapter  IV 
The  War  Debt 

THE  War  Debt  may  be  classified   into  Certificates  of 
Indebtedness,  Liberty   Bonds,  Victory  Liberty  Notes 
and  War-Savings  Certificates. 

Certificates  of  Indebtedness 

The  use  of  Certificates  of  Indebtedness  in  connection  with 
United  States  Government  financing  is  not  entirely  new.  As 
we  have  already  seen  in  the  historical  portion  of  this  pam- 
phlet, certificates,  or  Treasury  notes  as  they  were  then  called, 
were  extensively  used  in  financing  the  War  of  1 812,  in  financ- 
ing deficits  following  the  panic  of  1837,  during  and  following 
the  Mexican  War  in  1846  to  1851,  during  Buchanan's  ad- 
ministration and  during  the  Civil  War,  but  the  methods  pur- 
sued at  these  times  were  essentially  different  from  the  method 
which  has  been  pursued  in  connection  with  the  use  of  certifi- 
cates in  financing  the  present  war.  The  certificates  which  have 
been  issued  during  the  last  two  years  have  fallen  into  two 
classes.  One  class  has  been  issued  in  anticipation  of  the  sale 
of  the  long-term  or  Liberty  Bonds,  and  the  other  class  has 
been  issued  in  anticipation  of  the  payment  of  taxes.  In 
each  case,  the  certificates  have  automatically  been  cancelled 
either  through  the  receipt  of  revenues  by  the  Treasury  from 
the  sale  of  long-term  bonds  or  by  the  receipt  of  revenues  from 
the  payment  of  taxes.    The    aggregate  issues  of  these  certifi- 

[75 


76  ]  BANKERS  TRUST  COMPANY 

cates  since  April,  1917,  have  been  about  $21,000,000,000.  The 
amount  of  certificates  outstanding  on  April  1,  1919,  was  ap- 
proximately as  follows:  Issued  in  anticipation  of  taxes,  $500,- 
000,000;  issued  in  anticipation  of  bond  sales,  $5,000,000,000 
— total  of  $5,500,000,000.  The  major  part  of  these  certifi- 
cates bears  interest  at  the  rate  of  4^%.  The  certificates 
now  outstanding  will  be  automatically  retired  within  a  few 
months  by  receipts  from  taxes  or  from  the  sale  of  the  Victory 
Liberty  Notes. 

Liberty  Bonds 

There  have  been  four  issues  of  Liberty  Bonds  for  an  aggre- 
gate amount  of  $16,978,356,250.  The  amount  of  these  bonds 
outstanding  on  January  31,  1919,  was  officially  reported  at 
$16,650,078,300.  The  difference  in  the  amount  allotted  and 
amounts  outstanding  is  probably  accounted  for  by  purchases 
for  the  sinking  fund. 

The  subscription  books  for  the  first  issue  were  opened  on 
May  14,  1917,  and  the  total  subscriptions  amounted  to 
$3,035,226,850.  The  total  number  of  subscribers  is  estimated 
to  have  been  4,500,000  and  the  average  size  of  a  subscription 
$675.  It  is  estimated  that  4.24%  of  the  citizens  of  the  United 
States  subscribed  to  this  loan.  The  per  capita  subscription 
was  $28.63.  These  bonds  were  issued  bearing  an  interest  of 
3/^%  and  were  exempt  from  all  taxation  except  inheritance 
taxes.  They  carried  the  very  valuable  privilege  of  the  right  to 
the  holder  to  exchange  these  bonds  for  bonds  of  any  subse- 
quent series  bearing  a  higher  rate  of  interest  and  issued  prior 
to  the  termination  of  the  war  with  Germany,  the  date  of  such 
termination  to  be  fixed  by  a  proclamation  of  the  President. 
As  no  such  proclamation  has  as  yet  been  issued,  bonds  of  this 


THE  WAR  DEBT  [  JJ 


series  are  still  convertible  into  bonds  bearing  a  higher  rate  of 
interest.  According  to  the  terms  of  issue  they  were  not  con- 
vertible into  Treasury  Certificates  of  Indebtedness  or  other 
short  term  obligations.  By  the  terms  of  the  Second  Liberty 
Loan  Act  a  short  term  obligation  was  defined  to  be  one  matur- 
ing within  a  period  of  five  years.  No  definition  of  "  short  term 
obligation"  was  given  in  the  First  Liberty  Loan  Act.  Pre- 
sumably, however,  bonds  of  this  issue  would  not  be  convert- 
ible into  the  new  Victory  Loan  notes  as  these  are  issued  toma- 
ture  in  three  to  four  years.  The  holders  of  the  3>£%  bonds 
have  exercised  their  privilege  of  exchange  for  bonds  bearing  a 
higher  rate  of  interest  so  that  on  January  31  last,  the  amount 
of  bonds  of  this  issue  outstanding  bearing  3^2%  interest  was 
#1,413,805,200.  Of  bonds  converted  from  this  issue  bearing 
4%  interest  #198,865,200  were  then  outstanding  and  of  those 
converted  from  this  issue  bearing  4^4%  $376,129,100  were 
then  outstanding. 

The  books  for  subscriptions  to  the  Second  Liberty  Loan 
were  opened  on  October  1,  191 7,  and  closed  October  27th. 
The  total  amount  offered  was  #3,000,000,000  to  bear  interest 
at  the  rate  of  4%  per  annum.  The  amount  subscribed  was 
#4,617,532,300,  or  154%  of  the  amount  offered.  The  amount 
allotted  was  #3,088,766,150.  The  number  of  subscribers  was 
estimated  at  9,500,000,  giving  an  average  subscription  of  #486. 
The  bonds  were  subscribed  for  by  8.96%  of  the  population. 
The  per  capita  subscription  was  #43.56.  These  bonds  bore 
interest  at  the  rate  of  4%  per  annum  but  were  convertible 
into  any  subsequent  series  of  bonds  (not  including  United 
States  Certificates  of  Indebtedness,  War  Savings  Certificates 
and  other  obligations  maturing  not  more  than  five  years  from 
the  issue  of  such  obligations,  respectively),  bearing  interest  at 
a  higher  rate  than  four  per  cent,  per  annum,  provided  such 


78  ]  BANKERS  TRUST  COMPANY 

bonds  should  be  issued  before  the  termination  of  the  war  with 
Germany,  the  date  of  such  termination  to  be  fixed  by  a  proc- 
lamation of  the  President.  The  circular  under  which  the 
bonds  were  issued  provided  that  such  conversion  privilege 
must  be  exercised,  if  at  all,  within  six  months  after  the  date  of 
issue  of  any  such  subsequent  issue  of  bonds.  According  to 
the  terms  of  issue  this  privilege  of  conversion,  which  also  ap- 
plied to  the  First  Liberty  Bonds  which  had  been  converted 
into  4's,  terminated  as  to  both  of  these  issues  on  the  9th  of  No- 
vember, 191 8.  By  the  terms  of  the  Victory  Liberty  Loan  Act 
which  became  a  law  on  March  3,  1919,  the  Secretary  of  the 
Treasury  was  given  authority  to  extend  the  period  during 
which  conversions  might  be  made  into  \l/ic/o  bonds  and,  in 
accordance  with  the  authority  so  given,  he  has  extended  such 
privilege  of  conversion  until  further  notice.  It  is  manifestly 
to  the  interest  of  the  holders  of  4%  bonds  to  make  the  con- 
version and  obtain  the  higher  rate  of  interest  to  which  they 
are  entitled.  There  is  no  disadvantage  to  the  holder  in  mak- 
ing such  exchange  and  the  motives  of  no  one  can  be  impugned 
for  so  doing,  because  it  is  desired  by  the  Government  that  all 
owners  of  these  bonds  shall  exercise  their  rights  in  this  matter. 

The  Third  Liberty  Loan  was  offered  for  subscription  on 
April  6,  1918;  the  books  closed  on  May  4th.  These  bonds 
bear  interest  at  the  rate  of  4*4%  per  annum.  The  amount 
offered  was  $3,000,000,000.  The  amount  subscribed  and 
allotted  was  $4,176,516,850.  The  subscriptions  amounted  to 
139%  of  the  allotment.  The  total  number  of  subscribers  was 
18,308,325,  an  average  of  $228.12  each.  Over  seventeen  per 
cent.  (17.22%)  of  the  population  subscribed  to  these  bonds. 
The  per  capita  subscription  was  $39.40. 

The  Fourth  Liberty  Loan  was  offered  on  September  28, 
191 8.    The  books  closed  on  October  19th.    The  amount  of- 


THE  WAR  DEBT  [  79 


fered  was  #6,000,000,000  bearing  interest  at  the  rate  of  4^% 
per  annum.  The  amount  subscribed  and  allotted  was 
$6,993,073,250.  The  percentage  of  the  amount  subscribed  to 
that  offered  was  116.55.  I*  1S  estimated  that  there  were 
21,000,000  subscribers  to  this  loan — giving  an  average  sub- 
scription of  $333.  The  percentage  of  subscribers  to  popula- 
tion was  19.62  or,  say,  equivalent  on  the  census  methods  prac- 
tically to  one  subscription  for  every  family  in  the  United 
States.  This  was  probably  the  most  successful  war  loan  ever 
placed  in  this  or  any  other  country.  The  details  in  regard  to 
the  amount  of  Liberty  Bonds  now  outstanding,  their  maturity 
and  interest  dates,  denominations,  opening  and  closing  of 
transfer  books  and  present  conversion  privileges  will  be  found 
in  the  "  Public  Debt"  tables  printed  on  page  101  and  following 
pages. 

The  Victory  Liberty  Notes 

In  accordance  with  the  terms  of  the  Act  of  Congress  which 
became  a  law  on  March  3,  1919,  what  is  stated  to  be  the  last 
formal  Liberty  Loan  is  to  be  offered  on  April  21st,  the  amount 
to  be  $4,500,000,000.  These  notes  are  to  bear  interest  at  the 
rate  of  4^%  per  annum  and  are  to  be  exempt  from  State  and 
local  taxes,  except  estate  and  inheritance  taxes,  and  from  nor- 
mal Federal  income  taxes.  They  are  convertible  into  notes 
bearing  Z2A%  interest  which  are  to  be  exempt  from  all  Fed- 
eral, State  and  local  taxes.,  except  estate  and  inheritance  taxes. 
These  issues  will  mature  in  from  three  to  four  years.  They 
are  to  be  interconvertible  at  the  option  of  the  holder  and  during 
the  entire  period  for  which  they  are  outstanding.  Both  series 
of  notes  will  be  dated  and  bear  interest  from  May  20,  1919, 
and  will  mature  on  May  20,  1923,  but  will  be  redeemable,  at 


80]  BANKERS  TRUST  COMPANY 

the  option  of  the  Government,  on  June  15th,  or  December  15, 
1922.  Interest  will  be  payable  on  December  15,  1919,  and 
thereafter  semi-annually  on  June  15th  and  December  15th 
and  at  maturity. 

The  Secretary  of  the  Treasury  states  that  in  fixing  the 
terms  of  the  issue  he  has  been  guided  largely  by  the  desire  to 
devise  a  security  which  will  not  only  prove  attractive  to  the 
people  of  the  country  in  the  first  instance  but  the  terms  of 
which  should  insure  a  good  market  for  the  notes  after  the 
campaign  is  over  and  identical  prices  for  the  two  series  and 
should  not  affect  injuriously  the  market  for  the  existing 
bonds  of  the  Liberty  Loans.  It  is  also  officially  stated  that 
this  will  be  the  last  Liberty  Loan,  but  the  Secretary  says: 
"Although  as  the  remaining  war  bills  are  presented,  further 
borrowing  must  be  done,  I  anticipate  that  the  requirements  of 
the  Government,  in  excess  of  the  amount  of  taxes  and  other 
income  can,  in  view  of  the  decreasing  scale  of  expenditure, 
be  readily  financed  by  the  issue  of  Treasury  certificates  from 
time  to  time  as  heretofore,  which  may  be  ultimately  refunded 
by  the  issue  of  notes  or  bonds  without  the  aid  of  another  great 
popular  campaign  such  as  has  characterized  the  Liberty 
Loans."  The  attractive  terms  upon  which  these  notes  are 
offered  and  the  desire  of  all  the  people  of  the  United  States  to 
see  the  financing  of  the  war  brought  to  a  successful  and  hon- 
orable conclusion  assures  a  large  subscription  for  this  issue  of 
notes. 

War- Savings  Certificates  and  Thrift  Stamps 

The  War-Savings  Certificates  are  primarily  intended  for 
the  convenience  of  the  small  investor.  They  are  issued  as  dis- 
count certificates;  that  is  to  say,  when  paid  at  the  end  of  the 


THE  WAR  DEBT  [  8l 


five  years  which  they  have  to  run,  the  payment  will  include 
the  return  of  the  original  investment  plus  an  amount  which 
will  be  equal  to  an  income  of  about  four  per  cent,  per  annum 
compounded  quarterly. 

War-Savings  Certificates  become  an  obligation  of  the 
United  States  when,  and  only  when,  one  or  more  United 
States  War-Savings  Certificate  stamps  shall  be  affixed  there- 
to. There  are  two  series  of  War-Savings  Certificate  Stamps 
outstanding.  One  series  dated  in  1918  will  mature  January 
1,  1923.  These  all  have  a  maturity  value  of  five  dollars  each. 
The  second  series  dated  in  1919  will  mature  January  1,  1924. 
These  are  in  two  denominations,  one  having  a  maturity  value 
of  five  dollars  each  and  the  other  a  maturity  value  of  one  hun- 
dred dollars  each.  The  issue  price  of  the  1919  five-dollar 
series  is  $4.15  for  the  month  of  April  and  one  cent  additional 
for  each  subsequent  month.  Each  War-Savings  Certificate 
has  places  for  twenty  War-Savings  Certificate  Stamps  and 
each  of  such  stamps  affixed  thereto  will  have  a  maturity  value 
of  five  dollars  on  January  1st,  1924,  or  in  case  of  the  large 
stamps  will  have  a  maturity  value  of  one  hundred  dollars 
each. 

War-Savings  Certificate  Stamps  are  payable  at  maturity 
at  the  Treasury  Department  in  Washington,  or  at  any  money 
order  post-office.  Prior  to  maturity  they  may  be  cashed  at 
any  money-order  post-office  ten  days  after  written  demand, 
this  office  to  be  the  office  where  registered  in  the  case  of  a  re- 
gistered certificate.  War-Savings  Certificate  Stamps  of  the 
series  of  1919  will  be  cashed  at  the  same  price  as  the  issue 
price  given  above  and  at  one  cent  additional  for  each  subse- 
quent month.  War-Savings  Certificate  Stamps  of  the  series 
of  191 8  are  redeemable  on  a  similar  schedule.  To  protect  the 
owners  of  War-Savings  Certificate  Stamps  from  fraud  and 


82  ]  BANKERS  TRUST  COMPANY 

theft  the  Post  Office  Department  has  recently  ruled  that  here- 
after such  stamps  and  thrift  stamps  will  be  redeemed  only 
when  attached  to  Certificates.  Hereafter  loose  stamps  will  not 
be  redeemed. 

War-Savings  Certificates  may  be  registered  without  cost 
to  the  owners  at  any  post-office  of  the  first,  second  or  third 
class,  or  at  certain  specially  authorized  post-offices  of  the 
fourth  class  and  payment  in  respect  of  any  certificate  so  regis- 
tered will  be  made  only  at  the  post  office  where  registered. 

War-Savings  Certificates  when  registered  are  not  trans- 
ferable and  are  payable  only  to  the  respective  owners  named 
thereon,  except  in  the  case  of  the  death  or  disability  of  any 
such  owner. 

Not  more  than  one  thousand  dollars  maturity  value  of  each 
series  of  certificates  may  be  held  by  any  one  person,  at  any  one 
time. 

Thrift  Cards  and  Thrift  Stamps 

United  States  thrift  stamps  having  a  face  value  of  twenty- 
five  cents  and  bearing  no  interest  are  purchasable  at  post 
offices  and  at  many  other  agencies.  They  are  not  directly 
redeemable  in  cash  but  may  be  exchanged  for  War-Savings 
Certificate  Stamps  in  amounts  of  four  dollars.  The  owner 
must  pay  in  addition  to  the  four  dollars  in  Thrift  stamps  the 
difference  between  that  amount  and  the  current  issue  price  of 
War-Savings  Certificate  Stamps. 


Chapter  V 
The  Banks  and  United  States  Bonds 

FOR  many  years  the  largest  holders  of  United  States  bonds 
were  the  national  banks.    This  is  still  true  concerning  the 
Old  Debt. 

The  national  banking  system  was  established  in  1863  pri- 
marily for  the  purpose  of  providing  a  market  for  Government 
bonds.  With  this  object  in  view  the  banks  were  allowed  to 
issue  circulating  notes  upon  the  security  of  certain  issues  of 
bonds. 

Circulation 

There  are  still  three  issues  of  bonds  which  have  the  circula- 
tion privilege,  viz:  the  2%  Consols  of  1930,  $599,724,050  out- 
standing; the  Panama  Canal  2's,  $74,901,580  outstanding, 
and  the  4%  Loan  of  1925,  $118,489,000  outstanding — a  total 
of  $793,115,530  bonds,  of  which  total  on  April  1,  1919,  $688,- 
183,250  were  deposited  to  secure  national  bank  notes  and 
$17,411,800  to  secure  Federal  reserve  bank  notes.  That  is, 
nearly  90%  of  these  issues  is  held  by  the  banks. 

National  banks  are  permitted  to  issue  circulating  notes 
equal  in  amount  to  the  par  value  of  the  United  States  bonds 
deposited  with  the  Treasurer  of  the  United  States.  Upon  the 
average  amount  of  notes  outstanding  a  tax  must  be  paid. 
This  tax  is  one-half  per  cent,  a  year  in  the  case  of  the  two  per 
cent,  bonds  and  one  per  cent,  a  year  in  the  case  of  the  four  per 
cent,  bonds. 

T83 


84  ]  BANKERS  TRUST  COMPANY 

National  banks  have  the  privilege  of  increasing  or  decreas- 
ing the  amount  of  circulating  notes  which  they  have  outstand- 
ing, provided  the  total  amount  at  any  time  outstanding  does 
not  exceed  the  capital  stock  of  the  issuing  bank.  In  order  to 
retire  circulation,  and  to  regain  possession  of  bonds  deposited 
as  security,  the  banks  must  deposit  with  the  Treasurer  of  the 
United  States  an  equivalent  amount  of  legal  tender  currency. 
These  deposits  are  covered  into  the  Treasury  and  thereafter 
the  notes  are  treated  as  part  of  the  public  debt,  to  be  repaid 
upon  presentation. 

When  the  Federal  Reserve  System  was  established  it  was 
feared  that  the  national  banks  would  lose  heavily  upon  their 
holdings  of  two  per  cent,  bonds.  Therefore,  it  was  provided  in 
the  Federal  Reserve  Act  that  these  bonds  should  be  gradually 
retired  over  a  period  of  twenty  years  by  the  purchase  by  the 
Federal  reserve  banks  of  #25,000,000  bonds  annually.  The 
Federal  reserve  banks  have  the  privilege  of  converting  the 
bonds  so  purchased,  one-half  into  what  are  known  as  Conver- 
sion 3's,  payable  thirty  years  afterdate  of  issue,  and  one-half 
into  one-year  3%  Treasury  Notes. 

Instead  of  converting  the  Twos  purchased  from  the  na- 
tional banks  into  3%  bonds  and  notes  the  Federal  reserve 
banks  have  the  right  to  deposit  them  as  security  for  circulat- 
ing notes.  These  notes  are  similar  in  all  respects  to  the  na- 
tional banks  notes  and  are  issued  and  redeemed  under  the  same 
terms  and  conditions,  but  without  being  limited  in  amount  by 
the  amount  of  capital  of  the  Federal  reserve  bank  issuing 
them. 

The  Federal  reserve  banks  are  also  authorized  to  issue  Fed- 
eral reserve  bank  notes  under  the  terms  of  the  Pittman  Act  to 
take  the  place  of  silver  certificates  retired  because  of  the  sale 
of  silver  dollars  to  assist  in  equalizing  the  exchanges  in  the 


THE  BANKS  AND  UNITED  STATES  BONDS  [  85 

Far  East.  The  act  provides  for  a  special  issue  of  certificates 
of  indebtedness  equal  in  amount  to  that  of  the  silver  dollars 
retired.  Against  these  certificates  the  Federal  reserve  banks 
are  permitted  to  issue  an  equivalent  amount  of  notes.  It  is 
expected  that  eventually  the  silver  certificates  will  be  reissued 
and  the  notes  retired.  The  amount  of  notes  so  secured  out- 
standing April  1,  1919  was  $143,183,000.  The  notes  issued 
by  the  Federal  reserve  banks  against  Government  bond  or 
certificate  collateral  are  known  as  Federal  reserve  bank 
notes  to  distinguish  them  from  the  Federal  reserve  notes  for 
which  bond  collateral  is  not  required. 

The  Federal  reserve  banks  are  not  restricted  in  their  pur- 
chases of  United  States  bonds  to  the  holdings  of  the  national 
banks.  They  may  purchase  such  bonds  in  the  open  market 
and  may  take  out  circulation  upon  any  2%  bonds  or  4% 
bonds  of  1925  which  they  may  own,  however  acquired. 

There  is  a  substantial  profit  to  be  obtained  by  national 
banks  and  Federal  reserve  banks  by  taking  advantage  of  the 
circulation  privilege. 

Public  Deposits 

Prior  to  the  passage  of  the  Federal  Reserve  Act  only  the 
national  banks  could  be  used  as  depositories  of  public  moneys. 
The  Federal  Reserve  Act  provides  that  at  the  discretion  of  the 
Secretary  of  the  Treasury  the  Federal  reserve  banks  shall  also 
act  as  depositories,  but  these  banks  are  not  required  to  give 
collateral  security.  Member  banks  of  the  Federal  Reserve 
System,  other  than  national  banks,  may  not  act  as  regular 
depositories  of  public  moneys,  except  for  postal-savings  funds. 
These  may  be  deposited  with  the  State  banks  which  are 
members  of  the  system.  All  deposits  of  public  moneys  in 
member  banks  must  be  secured  by  deposit  with  the  Treasurer 


86]  BANKERS  TRUST  COMPANY 

of  the  United   States  of  United  States  bonds  or  other  ap- 
proved collateral. 

Under  the  terms  of  the  Liberty  Loan  acts  the  proceeds  of 
sales  of  Liberty  bonds  are  allowed  to  remain  on  special 
deposit  with  member  and  other  approved  banks.  Such  de- 
posits must  be  secured  by  United  States  bonds  or  other 
approved  collateral. 

Loans 

Any  member  bank  which  has  loaned  money  to  any  of  its 
customers  for  the  purpose  of  carrying  or  trading  in  bonds  or 
notes  of  the  United  States,  may  rediscount  with  its  Federal 
reserve  bank  the  bill  or  note  of  its  customer,  provided  such 
bill  or  note  (a)  has  a  maturity  at  the  time  of  discount  of  not 
more  than  90  days,  exclusive  of  days  of  grace;  and  (b)  has 
the  indorsement  of  the  member  bank.  Such  bill  or  note,  how- 
ever, need  not  necessarily  be  secured  and  need  not  be  drawn 
for  a  commercial  purpose  other  than  for  the  purpose  of  carry- 
ing or  trading  in  notes  or  bonds  of  the  United  States.  Any 
member  bank  which  has  itself  purchased  obligations  of  the 
United  States  may  procure  a  loan  from  its  Federal  reserve 
bank,  for  not  exceeding  15  days,  on  its  own  promissory  note, 
provided  such  note  is  secured  by  a  deposit  or  pledge  of  bonds 
or  notes  of  the  United  States. 

The  loans  of  this  character  by  the  Federal  reserve  banks 
about  April  1,  1919,  aggregated  about  $1,691,000,000. 

According  to  the  best  available  information,  the  member 
banks  of  the  Federal  Reserve  System  about  the  first  of  April, 
1919,  were  loaning  to  customers  upon  the  security  of  United 
States  bonds  and  certificates  and  held  investments  in  such 
bonds  and  certificates  aggregating  about  seven  billion  dollars. 
This  is  almost  exactly  thirty  per  cent,  of  the  war  debt. 


Chapter  VI 
Old  Debt  Taxation 

ALL  issues  of  bonds  and  certificates  made  prior  to  the 
.  present  war  are  "exempt  from  the  payment  of  all  taxes 
or  duties  of  the  United  States  as  well  as  from  taxation  in 
any  form  by  or  under  State,  municipal  or  local  authority." 

The  Treasury  Department  has  ruled  that  such  securities 
are  not  exempt  from  Federal  estate  taxes. 

War  Debt         As  to  Principal 

All  issues  are  exempt  from  any  form  of  taxation  as  to 
principal,  by  or  under  United  States,  State,  municipal  or 
local  authority;  except  estate  or  inheritance  taxes. 

As  to  Interest 

First  Liberty  Loan  $}/2S 

Exempt  from  all  taxation,  except  Federal  estate  or  inheri- 
tance taxes. 

First  Liberty  Loan  Converted  4s  and  4^s  or  Second-Con- 
verted 4}/i>  Second  Liberty  Loan  4s  and  Converted  4}^s,  Third 
Liberty  Loan  4}/^s,  Fourth  Liberty  Loan  4}^s,  Certificates  of 
Indebtedness,  War  Savings  Certificates. 

All  these  issues  are  exempt  from  taxation  as  to  interest 
except 

(a)  As  to  estate  or  inheritance  taxes,  and  (b)  as  to  sur- 
taxes, excess-profits  and  war  profits-taxes,  i.e.,  they 
are  exempt  from  the  normal  tax  and  during  1919 
from  the  corporation  income  tax  of  10%. 

[87 


88  ]  BANKERS  TRUST  COMPANY 

However,  the  income  from  an  aggregate  principal  amount 
of  #5,000  of  all  issues  combined  (not  #5,000  of  each  issue)  is 
exempt  from  all  tax,  except  estate  or  inheritance  taxes. 

The  Fourth  Liberty  Bond  Act  provided  for  the  following 
additional  exemptions  from  taxation  for  two  years  after  end 
of  the  war  as  fixed  by  proclamation  of  the  President :- 

Fourth  Liberty  Loan  4%* 

The  interest  on  #30,000  bonds,  or  any  part,  whether  the 
bonds  were  obtained  by  subscription  or  bought  in  the  market, 
may  be  received  free  of  surtaxes,  excess-profits  and  war-profits 
taxes  as  well  as  from  the  normal  tax. 

First  Liberty  Loan  Second-Converted  4%s  (Issue  of  Oct.  24, 

1918). 

The  interest  on  #30,000  bonds  obtained  by  conversion  from 
First  3>^s  under  the  terms  of  the  Fourth  Liberty  Loan  Act 
may  also  be  received  free  of  such  taxes. 

All  other  Liberty  Loan  4s  or  4}^s 

The  interest  on  #45,000  bonds,  or  any  part,  may  be  received 
free  of  above  taxes,  provided  at  the  time  of  making  tax  return 
the  holder  also  owns — as  an  original  subscriber — Fourth  Lib- 
erty Loan  4>^s  for  two-thirds  of  the  amount  of  other  4s  and 
4>^s  for  which  exemption  is  claimed. 

The  Victory  Liberty  Loan  Act  affords  the  following  addi- 
tional exemptions: 

All  Liberty  Loan  4s  or  4%s 

The  interest  on  #30,000  in  the  aggregate  of  the  above  issues 
received  on  and  after  January  1,  1919,  is  exempt  from  all 


TAXATION  [  89 


taxation  until  the  expiration  of  five  years  after  the  termina- 
tion of  the  war. 

All  Liberty  Loan  4s  or  4%s 

The  interest  on  $20,000  in  the  aggregate  of  the  above  bonds 
is  also  exempt  from  all  taxation  during  the  life  of  the  Vic- 
tory Liberty  Notes,  provided  the  aggregate  principal  amount 
of  bonds  for  which  such  exemption  is  claimed  does  not  ex- 
ceed three  times  the  amount  of  Victory  Liberty  Notes  which 
the  owner  has  obtained  as  an  original  subscriber  and  still 
owns  at  the  date  of  making  his  tax  return. 

Example: 

Liberty  Loan  4s  and  4K"s  which  may  be  held  free  of  all  taxes  (except 
estate  or  inheritance  taxes)  including  the  normal  income  tax,  surtaxes, 
excess  profits  and  war-profits  taxes. 

For  life  of  *bonds $5,000 

For  two  years  after  close  of  war: 

First-Second  Converted  ±%s  dated  Oc- 
tober 24,  1918 30,000 

Fourth  4><s 30,000 

Other  4s  and  4Ks — provided  owner  is 
an  original  subscriber  to  Fourth  4>£s 
for  two-thirds  of  amount  for  which 
exemption  is  claimed — to  an  aggre- 
gate amount  of 45,000 

Total  for  two  years  after  war 105,000 

For  five  years  after  close  of  war : 

Liberty  4s  and  4Xs $30,000 

During  Uje  of  Victory  Liberty  Notes: 
All  4s  and  4>^s — provided  owner  is  an 

original  subscriber  to  Victory  Liberty 

Notes  for  one-third    of    amount  for 

which  exemption  is  claimed — to   an 

aggregate  amount  of 20,000 

Aggregate  amount    of    Liberty    4s  and  4>£s 

which  may  be  held  free  of  tax $160,000 

♦Provided  no  exemption  is  claimed  because  of  holdings  of  certificates. 


90  ]  BANKERS  TRUST  COMPANY 

Victory  Liberty  Notes 

4$i°/o  Convertible  Gold  Notes 

The  interest  upon  these  Notes  is  exempt  from  the  normal 
Federal  income  tax.  They  are  also  exempt  from  all  Federal, 
State  and  local  taxation,  except  estate  and  inheritance  taxes. 

5^4%  Convertible  Gold  Notes 

The  interest  upon  these  notes  is  exempt  from  all  Federal 
income  taxes.  They  are  also  exempt  from  all  Federal,  State 
and  local  taxation,  except  estate  and  inheritance  taxes. 

Interest  on 

Money  Borrowed  to  Purchase  United  States  Bonds 

All  interest  paid  or  accrued  within  the  taxable  year  on 
indebtedness  incurred  or  continued  to  purchase  or  carry  obli- 
gations of  the  United  States  issued  after  September  24,  1917, 
may  be  deducted  in  computing  net  income  subject  to 
taxation. 

Inheritance  Taxes 

None  of  the  war  loans,  certificates,  or  the  income  there- 
from is  exempt  from  Federal  estate  or  inheritance  taxes. 

The  Liberty  Loan  4^4's  of  any  series  and  the  Victory 
Notes  may  be  used  at  par  and  accrued  interest  in  paying 
estate  or  inheritance  taxes,  provided  they  were  continuously 
held  by  the  decedent  for  six  months  prior  to  death. 

Calculating  Tax  Exemptions 
under  the  Federal  Revenue  Act  of  igi8 

The  application  of  this  law  to  large  incomes  and  to  corpor- 
ate incomes  is  so  complicated  that  instead  of  endeavoring  to 


TAXATION  [  91 


set  forth  here  the  manner  in  which  holdings  of  United  States 
bonds  would  affect  taxable  income,  we  suggest  that  any  one 
interested  communicate  with  our  tax  expert. 

Special  Tax  Service 

Our  tax  expert  will  upon  request  furnish  all  available  data 
concerning  the  intricacies  of  the  income  tax  law  as  applied  to 
corporations  or  individuals  owning  United  States  securities. 
We  have  on  file  for  the  use  of  customers  the  latest  rulings  of 
the  Commissioner  of  Internal  Revenue,  also  annotated  copies 
of  the  tax  law. 

State  Taxation 

The  courts  have  decided  that  although  States  may  not  in 
any  form  levy  a  tax  upon  United  States  securities,  they  may 
tax  as  the  property  of  their  owners  the  shares  of  banks  and 
other  corporations  the  assets  of  which  consist  in  whole  or  in 
part  of  such  securities,  and  in  valuing  the  shares  for  the  pur- 
pose of  taxation  the  shareholder  cannot  deduct  the  value  of 
the  national  securities  held  by  the  corporation  the  shares  of 
which  are  taxed. 

However,  a  recent  decision  by  the  United  States  District 
Court  for  the  Southern  District  of  Iowa,  in  regard  to  the 
attempted  assessment  for  taxation  of  the  holdings  of  Liberty 
Bonds  by  banks  is  of  interest.  In  this  case,  while  the  State 
claimed  that  the  tax  was  laid  upon  the  value  of  the  stock  as 
the  property  of  the  shareholder  and  not  upon  the  Government 
bonds  owned  by  the  bank,  the  court  ruled  that  although  the 
tax  was  nominally  upon  the  shares  of  the  bank  as  the  property 
of  the  shareholders,  it  was  in  reality  a  tax  upon  the  property 
of  the  bank  and  therefore  invalid  so  far  as  it  included  any 
exempt  Government  securities. 


Chapter  VII 
Coupon  Bonds 

FOR  the  convenience  of  investors  the  Government  issues 
two  forms  of  bonds.  One  form  is  known  as  the  coupon 
bond — this  is  payable  to  bearer,  exactly  the  same  as  a  bank 
note. 

The  interest  on  a  coupon  bond  is  collected  by  clipping  from 
the  bond  a  coupon  calling  for  the  amount  of  interest  due  on 
any  given  interest  date.  These  interest  coupons  are  payable 
to  bearer  and  may  usually  be  cashed  at  any  banking  institu- 
tion. The  coupons  from  Liberty  Bonds  may  also  be  cashed 
at  money-order  post-offices  and  at  a  number  of  other  places. 

On  account  of  the  ease  with  which  coupon  bonds  can  be 
transferred  from  hand  to  hand  and  also  because  of  the  ease 
with  which  the  interest  coupons  can  be  collected,  coupon 
bonds  are  preferred  for  temporary  investments  by  those  who 
may  wish  to  sell  them  within  a  short  time  and  by  those  who 
wish  to  avoid  the  trouble  attending  the  sale  of  registered 
bonds. 

The  courts  have  held  that  a  coupon  bond  payable  to  bearer 
is  good  in  the  hands  of  a  bona  fide  holder  who  acquires  it  by 
honest  purchase  at  a  fair  market  price  without  knowledge 
that  it  has  been  fraudulently  obtained  by  any  previous  holder, 
even  though  the  bond  may  have  been  lost  by  or  stolen  from 
another  party.  The  recovery  of  lost  or  stolen  coupon  bonds 
or  coupons  is  therefore  attended  with  great  difficulty  and  can 
rarely  be  accomplished  unless  they  are  found  in  the  hands 
92] 


COUPON  BONDS  [  93 


of  the  thief  or  his  accomplice  or  of  some  person  who  has 
obtained  possession  of  them  by  fraud  or  under  circumstances 
which  will  convict  him  of  knowledge  or  suspicion  of  fraud 
on  the  part  of  those  from  whom  he  received  them. 

The  fact  that  lost  or  stolen  coupon  bonds  have  been  adver- 
tised by  their  numbers  will  not  invalidate  the  title  of  an 
innocent  holder  for  value,  as  it  cannot  be  held  that  every 
purchaser  of  a  bond  is  bound  to  have  knowledge  of  all  such 
notices  or  advertisements.  The  Treasury  Department  does 
not  attempt  to  caveat  or  stop  payment  of  lost  or  stolen  coupon 
bonds  or  to  assume  any  responsibility  of  deciding  the  question 
of  disputed  ownership,  but  recognizes  only  the  bearer  as 
entitled  to  payment.  Coupon  bonds  may  be  exchanged  for 
registered  bonds. 


Chapter  VIII 
Registered  Bonds 

REGISTERED  bonds  are  certificates  made  payable  to 
the  owner,  whose  name  and  address  are  entered  on  the 
books  of  the  Treasury  Department  at  Washington,  and  whose 
name  appears  on  the  face  of  the  bonds;  title  can  be  passed 
only  by  the  owner  executing  the  assignment  form  found  on 
the  back  of  the  bond  and  having  his  signature  witnessed  by 
the  proper  official.  Interest  on  registered  bonds  is  paid  by 
check. 

Coupon  bonds  may  be  exchanged  for  registered  bonds  and, 
in  the  case  of  the  Liberty  Bonds,  registered  bonds  may  be 
exchanged  for  coupon  bonds,  but  registered  bonds  of  the  old 
issues  may  not  be  exchanged  for  coupon  bonds.  All  United 
States  Government  bonds  now  outstanding  are  issued  in  both 
coupon  and  registered  form. 

Assignments 

In  making  assignments  of  registered  bonds,  care  should  be 
taken  to  od  erve  the  following  regulations  of  the  Treasury 
Department.  The  name  of  the  registered  owner  must  be 
spelled  exactly  the  same  on  the  assignment  form  as  it  is  on 
the  face  of  the  bond.  If  the  full  name  is  given  on  the  face 
of  the  bond  it  must  be  given  on  the  back;  the  signature  must 
be  witnessed  by  the  proper  official,  i.e.,  an  official  of  the  Fed- 
eral Government  who  is  authorized  to  receive  acknowledg- 
ments, or  executive  officers  of  Federal  reserve  banks,  or  their 
branches,  and  of  national  banks  and  incorporated  State  banks 

94l 


REGISTERED  BONDS  [  95 

and  trust  companies  who  are  authorized  by  the  bank  to  per- 
form acts,  attested  by  the  seal  of  the  bank.  A  notary  public 
is  not  authorized  to  witness  assignments. 

In  all  cases  the  officer  before  whom  an  assignment  is 
acknowledged  must  append  his  official  designation  and 
address,  and  affix  his  official  seal  if  he  has  one;  if  he  has  not 
a  seal  this  fact  must  be  made  known  and  attested.  No  official 
of  the  United  States  is  authorized  to  charge  a  fee  for  witness- 
ing an  assignment  of  United  States  registered  bonds  or  of  a 
power  of  attorney  to  assign  such  bonds,  or  to  collect  interest 
thereon  and,  as  a  rule,  no  charge  for  this  service  is  made  by 
bank  officials. 

Assignment  by  Married  Woinen 

In  the  case  of  a  married  woman  whose  bonds  stand  in  her 
maiden  name  the  assignment  should  be  made  in  the  maiden 
name  followed  by  the  married  name,  thus,  "Mary  Smith, 
now  by  marriage  Mary  Brown." 

Assignment  by  Representative  and  Successor 

In  case  of  death  or  successorship  the  representative  of  the 
deceased  person,  or  the  successor,  must  furnir\  official  evi- 
dence of  such  decease  or  successorship  and  of  his  own  appoint- 
ment, authority,  or  power.  An  executor  or  administrator  may 
assign  bonds  standing  in  the  name  of  the  deceased  person 
in  whose  stead  such  executor  or  administrator  shall  be  acting. 

Where  there  are  two  or  more  legal  representatives  all  must 
unite  in  the  assignment,  unless  by  a  decree  of  court  or  testa- 
mentary provision  some  one  or  more  of  them  is  or  are  desig- 
nated and  empowered  to  dispose  of  the  bonds. 


96]  BANKERS  TRUST  COMPANY 

Bonds  standing  in  the  name  of  a  person  in  the  capacity  of 
a  fiduciary  or  trustee  can  not  be  assigned  after  his  death  by 
his  executors  or  administrators,  but  must  be  assigned  by  a 
successor  duly  appointed  by  the  court  having  jurisdiction. 

Assignments  by  an  executor,  administrator,  trustee,  guar- 
dian or  attorney  to  himself  individually  are  void  unless  he  be 
specially  authorized  to  execute  such  assignment  by  a  court 
having  jurisdiction  of  the  matter. 

Assignments  by  Attorney  in  Fact 

A  person  entitled  to  assign  bonds  may,  by  a  duly  executed 
power  of  attorney,  appoint  an  attorney  in  fact  for  that  pur- 
pose. By  virtue  of  the  authority  so  conferred,  the  attorney 
can  execute  the  assignments  in  the  same  manner  as  the 
principal,  and,  provided  the  power  of  attorney  authorizes 
him  to  do  so,  he  may  appoint  one  or  more  substitutes  to  act 
in  his  place.  An  assignment  by  an  attorney  in  fact  or  his 
substitute  to  himself  individually  is  void  unless  sanctioned 
by  a  court  of  competent  jurisdiction;  in  which  case  a  certified 
copy  of  the  court  order  must  be  filed  with  the  department. 

Powers  of  attorney  authorizing  the  assignment  of  bonds 
should  be  sent,  for  record,  to  the  Secretary  of  the  Treasury, 
Division  of  Loans  and  Currency. 

Powers  of  attorney  to  assign  or  transfer  registered  bonds 
must  be  acknowledged  in  the  presence  of  one  of  the  officers 
authorized  to  witness  assignments. 

hiterest  Payments 

Checks  for  interest  on  registered  bonds  are  mailed  by  the 
Government  to  the  registered  owner,  or  to  any  other  person 


REGISTERED  BONDS  [  97 

who  may  be  designated  by  the  owner  to  receive  the  interest. 
These  checks  are  payable,  when  properly  endorsed,  on  presen- 
tation at  the  United  States  Treasury,  at  the  office  of  any 
Assistant  Treasurer  of  the  United  States,  Federal  reserve 
bank,  or  at  any  national  bank  that  has  been  designated  an 
active  depositary  for  public  moneys.  Almost  any  bank  or 
trust  company  will  cash  these  checks  upon  proper  identifi- 
cation of  the  holder.  The  endorsement  must  be  in  ink  or 
indelible  pencil  and  must  correspond  exactly  with  the  name 
as  printed  on  the  face  of  the  check.  A  married  woman  when 
endorsing  a  check  drawn  to  her  maiden  name  should  endorse 
it  with  both  names  as  stated  above  under  "Assignments." 
Endorsements  made  by  an  agent,  attorney,  guardian,  exec- 
utor, administrator,  or  trustee  of  an  estate  are  not  recognized 
unless  evidence  of  authority  has  been  filed  with  the  Auditor 
for  the  Treasury  Department. 

Powers  of  Attorney  to  Collect  Interest 

Powers  of  attorney  and  testamentary  evidence  designed  as 
authority  to  collect  interest  checks  should  be  filed  with  the 
Auditor  for  the  Treasury  Department  and  that  officer 
should  specifically  be  advised  at  which  of  the  offices  referred 
to  in  the  previous  paragraph  it  is  desired  that  the  interest 
checks,  under  such  powers,  shall  be  paid.  Notice  of  the 
appointment  of  an  attorney  to  collect  interest  should  be 
given  to  the  Secretary  of  the  Treasury. 

Powers  of  attorney  to  indorse  and  collect  interest  checks 
must  be  acknowledged  before  one  of  the  officers  authorized 
to  witness  the  assignments  of  registered  bonds  or  before  a 
notary  public.  The  acknowledging  officer  must  add  his 
official  designation,  address  and  an  impression  of  his  seal,  if 
he  has  one. 


98  ]  BANKERS  TRUST  COMPANY 

Interest  to  Joint  Holders  of  Registered  Bonds 

Interest  will  be  paid  to  any  one  of  several  joint  holders, 
co-trustees,  joint  executors,  administrators  or  guardians;  but 
in  the  execution  to  a  third  party  of  a  power  to  collect  interest 
checks  all  must  join.  In  case  of  the  death  of  any  such 
joint  holders,  co-trustees,  and  so  forth,  the  survivor  or  sur- 
vivors will  be  recognized  as  having  full  authority,  upon  due 
proof  of  such  death  and  survivorship. 

Opening  and  Closing 
of  Transfer  Books;  Denominations 

The  transfer  books,  for  the  purpose  of  changing  the  owner- 
ship of  registered  bonds,  open  and  close  in  accordance  with 
the  schedule  printed  in  the  tables  to  be  found  on  pages  102 
and  103.  Coupon  bonds  can  be  exchanged  for  registered  bonds, 
or,  in  the  case  of  the  Liberty  Bonds,  registered  bonds  for  coupon 
bonds,  whenever  the  transfer  books  are  open.  The  denomin- 
ations in  which  bonds  of  each  issue  are  made  are  also  given  in 
this  table. 


Chapter  IX 
Lost,  Destroyed  and  Defaced  Bonds 

Coupon  Bonds 

THERE  is  no  authority  under  existing  law  empowering 
the  Treasury  Department  to  issue  duplicates  of  United 
States  coupon  bonds  which  have  been  lost  or  stolen,  or  to 
redeem  such  bonds. 

In  the  case  of  coupon  bonds  which  have  been  destroyed  or 
defaced,  the  Treasury  Department  is  authorized  upon  proper 
evidence  to  issue  new  bonds.  An  indemnity  bond  must  be 
filed. 

Destroyed  Coupons 

In  cases  where  coupons  detached  from  the  bonds  have  been 
destroyed  or  defaced,  there  is  no  relief. 

So  long  as  coupons  remain  attached  to  the  bonds  with 
which  they  were  issued  they  are  deemed  to  constitute  parts 
thereof,  and  therefore  if  one  or  more  coupons  whilst  attached 
to  a  bond  becomes  destroyed  or  defaced,  this  would  be  a 
case  of  partial  destruction  or  defacement  of  the  bond  and  a 
duplicate  bond  with  proper  coupons  attached  would  be  issued. 

Registered  Bonds 

In  the  case  of  the  loss,  theft,  or  supposed  destruction  of 
United  States  registered  bonds  immediate  notification  of  such 
fact  should  be  sent  the  Secretary  of  the  Treasury,  Division 
of  Loans  and  Currency,  in  order  that  a  caveat  may  be 
entered  on  the  books  of  the  department  against  the  transfer 
of  such  bonds. 

[99 


United  States  Public  Debt 
April  i,  1919 


Compiled  from  official  data 

See  note  next  page. 

OLD  DEBT  BEARING  INTEREST 

Interest 

Redeemable  or 

Title  of  Loan 

Rate     Payable 

Payable 

Outstanding 

Consols  of  1930f 

2       Q.  Jan. 

After       April  1,  1930 

$599,724,050 

Loan  of  1925f 

4      Q.  Feb. 

After       Feb.    1,  1925 

118,489,900 

Panama  Canal, 

Series  1906f 

2       Q.  Feb. 

After      Aug.  1,  1916 
Payable  Aug.  1,  1936 

48,954,180 

Series  1908f 

2       Q.  Feb. 

After       Nov.  1,  1918 
Payable  Nov.  1,  1938 

25,947,400 

Series  1911 

3       Q.  Mar. 

Payable  June  1,  1961 

50,000,000 

Conversion  Bonds 

3       Q.  Jan. 

Payable  30  years  from 

date,  1916-17 

28,894,500 

Postal  Savings 

Bonds 

2K     J.&J. 

After  1  year  from  date 
Payable  20  years  from 

11,350,760 

r  interest-bearin 

date,  1911-18 
g  debt     

Aggregate  non-wa 

$883,360,790 

Matured  non-war 

debt  upon  which  interest  has  ceased    . 

4,437,250 

Total  non-war  bonded  debt    . 

$887,798,040 

OLD  DEBT  NOT  BEARING  INTEREST 

United  States  Notes    ....  $346,681,016 

Less  Gold  Reserve   ....     152,979,025  $193,701,991 

Old  Demand  Notes 53,012 

Fractional  Currency 6,844,418 

National  Bank  Notes  and  Federal  Reserve 

Bank  Notes  assumed  by  the  United  States 

upon  deposit  of  lawful  money  for  their 

retirement 42,546,190  243,145,611 

Total  Old  Debt $1,130,943,651 


tAvailable  as  security  for  bank  notes. 
IOO] 


UNITED  STATES  PUBLIC  DEBT— Continued 

WAR  DEBT 

Interest  Redeemable  or 

Title  of  Loan     Rate     Payable  Payable  Outstanding 

Liberty  Loans 

First  Zyi    J  &  D      After      June  15,  1932     $1,413,805,200 

Payable  June  15,  1947 
Converted      4        J  &  D      After      June  15,  1932  198,865,200 

Payable  June  15,  1947 
Converted      4#    J  &  D      After      June  15,  1932 

Payable  June  15,  1947  376,129,100 

Second  4        M  &  N      After       Nov.  15,  1927 

Payable  Nov.  15,  1942  860,365,100 

Converted       4}<     M  &  N      After       Nov.  15,  1927 

Payable  Nov.  15,  1942        2,752,153,400 
Third  \yi     M  &  S       Payable  Sept.  15,  1928       4,055,687,050 

Fourth  4}<     A  &  O       After       Oct.    15,  1933  )     6  Q03  Q73  25Q 

Payable  Oct.    15, 1938  (       '       '       ' 
Victory  Notes 

Free  of  Tax         3^4  )  On  June  15  or  ) 

>  J  &  D  Dec.   15,  1922  >   * 4,500, 000,000 

Taxable  ±X  )  Payable  May  20,  1923  ) 

Total  Liberty  Loans $16,650,078,300 

War  Savings  and 
Thrift  Stamps 

Approximate  amounts  j  Payable  Jan.     1,1923        1,000,000,000 

1  Jan.     1,  1924  40,000,000 

Certificates  of  Indebtedness — Approximate  amount.        5,500,000,000 

Total  War  Debt $23,190,078,300 

Total  Old  Debt  (see  opposite  page)      1,130,943,651 

Total  Debt $24,321,021,951 


♦Authorized — Not  included  in  total.    Will  retire  a  corresponding  amount  of  Certificates 
of  Indebtedness. 

Note. — The  above  statement  is  compiled  from  the  Financial  Statement  of  the  United 
States  Government  for  October  31,  1918,  and  the  Daily  Statements  of  the  United 
States  Treasury  Department  for  the  period  from  November  1.  1918  to  March  31,  1919 
and  from  other  official  statements.  There  are  some  discrepancies  which  cannot  be  recon- 
ciled, but  the  ficures  are  believed  to  be  substantially  correct. 

[  IOI 


Transfer  Books — Denominations 


Old  Debt 

Transfer  Books 

Denominations 

Close 

Open 

Coupon 

Registered 

Panama  Canal 
2*S  1916-1936 

Jan.    15 
April  15 
July   15 
Oct.    15 

Feb.   1 
May  1 
Aug.  1 
Nov.  1 

$20 

100 

1,000 

$20 

100 

1,000 

10,000 

Panama  Canal 
2's  1918-1938 

Jan.    15 
April  15 
July   15 
Oct.    15 

Feb.   1 
May  1 
Aug.  1 
Nov.  1 

$20 

100 

1,000 

$20 

100 

1,000 

10,000 

Refunding  Consols 
2's  1930 

Nov.  30 
Feb.  28 
May  31 
Aug.  31 

Jan.    1 
April  1 
July   1 
Oct.    1 

$50 

100 

500 

1,000 

$50 

100 

500 

1,000 

5,000 

10,000 

50,000 

Postal  Savings 
21/2,S  1931-1937 

Nov.  30 
May  31 

Jan.    1 
July    1 

$20 

40 

60 

80 

100 

500 

$20 

40 

60 

80 

100 

500 

Panama  Canal 
3's  1961 

Feb.   15 
May  15 
Aug.  15 
Nov.  15 

Mar.  1 
June  1 
Sept.  1 
Dec.  1 

$100 

500 

1,000 

$100 

500 

1,000 

10,000 

Conversion 
3's  1946-1947 

Nov.  30 
Feb.  28 
May  31 
Aug.  31 

Jan.   1 
April  1 
July   1 
Oct.    1 

$100 

1,000 

5,000 

10,000 

$100 

1,000 

5,000 

10,000 

Long  Fours 
4'S  1925 

Jan.    15 
April  15 
July   15 
Oct.    15 

Feb.   1 
May  1 
Aug.  1 
Nov.  1 

$50 

100 

500 

1,000 

$50 

100 

500 

1,000 

5,000 

10,000 

102  ] 


TRANSFER  BOOKS- 

-CONTINUED 

Transfer  Books 

Denominations 

War  Debt 

Liberty  Bonds 

Close 

Open 

Coupon 

Registered 

First,  1932-'47 

May  15 

Tune  16 

$50 

$100 

11/  »0  Dated 
°"2  s  June  15,  1917 

Nov.  15 

Dec.  16 

100 

500 

500 

1,000 

1,000 

5,000 

Conversion  privileges — See  Note. 

10,000 

50,000 

100,000 

First  Converted,  1932-'47~ 

A  9     Dated 

*  s  Nov.  15,  1917 

Conversion   privileges  —  See 

$50 

$50 

Note. 

100 

100 

First  Converted,  1932-'47 

May  15 

June  16 

500 

500 

41//,  Dated 

^  /4  »  May  9,  1918 

Nov.  15 

Dec.  16 

1,000 

1,000 

5,000 

5,000 

First  Second-Converted, 

10,000 

10,000 

1932-'47 

50,000 

41A»«5  Dated, 

^  /4  s  Oct.  24,  1918 

100,000 

Second,  1927-42 

4 »    Dated,                          \ 
^  sNov.  15,  1917              j 

$50 

$50 

100 

100 

Conversion  privileges  —  See     f 
Note.                                          f 

Second  Converted,              ) 

April  15 
Oct.    15 

May  16 
Nov.  16 

500 
1,000 
5,000 

500 
1,000 
5,000 

1927-'42                           I 

10,000 

10,000 

4-Va\  Dated,                  \ 
^  /4  s  May  9,  1918         / 

50,000 

100,000 

Third,  1928 

Feb.  15 

Mar.  16 

$50 

$50 

^  /4  »  May  9,  1918 

Aug.  15 

Sept.  16 

100 

500 

1,000 

100 

500 

1,000 

Fourth,  1933-'38 

Mar.  15 

April  16 

5,000 

5,000 

4Va\  Dated- 

^  /4  »  October  24,  1918 

Sept.  15 

Oct.    16 

10,000 

10,000 

50,000 

100,000 

Victory  Notes 

Nov.  15 

Dec.  16 

$50 

$50 

1922-1923 

May  15 

June  16 

100 

100 

3%'s  j  Dated, 

500 

500 

43^»s^May20,  1919 

1,000 

5,000 

10,000 

1,000 

5,000 

10,000 

50,000 

100,000 

(103 


104 ]  BANKERS  TRUST  COMPANY 

NOTE— CONVERSION  PRIVILEGES 
First  Liberty  3}4'b 

If  any  subsequent  series  of  bonds  (not  including  United  States  certifi- 
catesofindebtednessand  other  short-term  obligations)  bearing  a  higher  rate 
of  interest  than  2>}4%  shall  be  issued  prior  to  the  termination  of  the  war 
with  Germany,  the  date  of  such  termination  to  be  fixed  by  a  proclama- 
tion of  the  President,  the  holders  of  the  First  Liberty  3*4's  shall  have 
the  privilege  of  converting  the  same,  within  such  period  and  upon  such 
further  terms  and  conditions  covering  matters  of  detail  as  the  Secretary 
of  the  Treasury  may  prescribe,  into  an  equal  par  amount  of  bonds 
bearing  such  higher  rate  of  interest  and  substantially  identical  with 
the  bonds  of  such  subsequent  series,  except  that  the  bonds  to  be  issued 
upon  such  conversion  shall  be  identical  with  the  bonds  of  the  First 
Liberty  Loan  as  to  maturity  of  principal  and  of  interest,  and  terms  of 
redemption.  The  present  privilege  of  conversion  into  First  Liberty  Loan 
Second-converted  4>£%  bonds  expires  April  24,  1919. 


Second  Liberty  4's  and 
First  Converted  4's 

By  the  terms  of  the  Victory  Liberty  Loan  Act  which  became  a  law 
March  3,  1919,  it  is  provided  that  the  Conversion  Privilege  which 
expired  November  9,  1918,  may  be  extended  by  the  Secretary  of  the 
Treasury  for  such  period,  and  upon  such  terms  and  conditions  and 
subject  to  such  rules  and  regulations  as  he  may  prescribe.  For  the 
purpose  of  computing  the  amount  of  interest  payable,  bonds  presented 
for  conversion  under  any  such  extension  shall  be  deemed  to  be  converted 
on  the  dates  for  the  payment  of  the  semi-annual  interest  on  the  respec- 
tive bonds  so  presented  for  conversion  next  succeeding  the  date  of  such 
presentation.  The  Secretary  has  announced,  under  date  of  March  7, 
1919,  an  extension  of  this  conversion  privilege  beginning  March  7,  1919, 
and  ending  at  such  date  as  may  be  fixed  by  the  Secretary  on  six  months' 
public  notice. 

Neither  of  these  4%  issues  or  the  4>4%  bonds  into  which  they  are 
convertible  have  any  other  conversion  privileges. 


Trend  of  the  Market 
Before  and  After  Former  Wars  and  Other  Special  Crises 


AFTER  FUNDING  OF  REVOLUTIONARY  DEBT 

Following  the  passage  of  the  Act  on  August  12,  1790,  providing  for  the 
funding  of  the  Revolutionary  debt,  the  first  recorded  transactions  in  the 
new  6%  bonds  were  at  70%.  On  December  31  the  bonds  were  quoted 
at  90%.  By  August  1,  1791,  they  had  advanced  to  par  and  on  Decem- 
ber 3,  1791,  they  were  selling  at  111%.  On  February  1  of  the  following 
year,  1792,  they  sold  at  128%.  This  marked  the  climax  of  the  specula- 
tion in  the  bonds,  although  during  the  entire  year  1792  quotations 
ranged  around  105%  to  110%. 

WAR  OF  1812 

Prior  to  the  War  of  1812  what  was  known  as  the  "old  6%  stock,"  the 
same  issue  as  that  referred  to  above,  was  quoted  in  January,  1809,  at 
103%,  and  in  July  at  I0l}4%,  while  the  3s  were  quoted  at  about  65%. 
In  1811  the  6s  were  quoted  in  the  London  market  at  101%  to  102%  and 
the  3s  at  65%  to  70%.  In  1812  the  Government  placed  a  new  issue  of 
6%  stock  at  par,  but  in  1813  was  unable  to  obtain  more  than  88%  for  6% 
stock.  Taking  this  issue  as  a  basis  we  find  that  in  1814  it  sold  at  a  low 
price  of  85%  and  a  high  price  of  93%.  In  January,  1815,  it  was  selling 
as  low  as  76%.  Following  the  declaration  of  peace  it  sold  at  97>£%  in 
July.  It  maintained  this  price  until  about  July,  1816,  when  it  advanced 
to  99>2%;  in  January,  1817,  it  was  quoted  at  par  and  in  January,  1818, 
at  106tf  %. 

THE  MEXICAN  WAR 

At  the  opening  of  the  war  in  1846  6%  bonds  were  sold  at  prices  rang- 
ing from  100  to  101,  and  in  1847  a  large  issue  of  6s  was  placed  at  prices 
ranging  from  101  y£  to  102.  The  last  battle  of  the  war  was  fought  in  Sep- 
tember, 1847.  Quotations  in  the  early  part  of  1847  for  6%  stock  were 
as  high  as  108^1  Toward  the  end  of  the  year  prices  fell  off  toabout  par. 
However,  by  August,  1848,  prices  had  advanced  to  10424  and  in  Decem- 
ber to  107>1  In  1849  the  6s  sold  at  109  in  January,  110  to  111  in  Feb- 
ruary and  maintained  this  price  in  March.  In  May  they  had  advanced 
to  112  and  in  June  to  115.  In  1850,  the  Government  was  able  to  sell 
5%  stock  at  par  which  was  equivalent  to  about  120  for  6%  stock. 

[105 


106  ]  BANKERS  TRUST  COMPANY 

THE  CIVIL  WAR 
It  so  happens  that  there  were  two  issues  of  bonds  made  at  the  begin- 
ning of  the  Civil  War  which  were  quoted  all  through  the  period  of  the 
war  and  which,  therefore,  form  a  very  good  basis  for  comparison.  These 
are  the  6s  of  1880  and  1881.  As  the  quotations  of  bonds  during  the  Civil 
War  were  made  in  the  terms  of  the  depreciated  legal  tender  notes,  it  is 
necessary  to  reduce  quotations  to  a  gold  basis.  This  has  been  done  in 
the  following  table: 


Year 

High 

Low 

Year 

High 

Low 

'1861 

95.75 

83.00 

1866 

84.75 

73.71 

1862 

100.75 

85.13 

1867 

82.36 

78.88 

1863 

85.06 

51.53 

1868 

84.18 

78.67 

1864 

68.92 

40.15 

1869 

99.07 

82.22 

H865 

80.25 

50.73 

1870 

102.02 

96.14 

•Fort  Sumter  fired  on  April  12.    fLee  surrendered  April  9.      See  also  pages  43  and  60. 

THE  CURRENCY  CRISIS  OF  1894-1897 
During  President  Cleveland's  first  administration,  in  order  to  main- 
tain the  parity  of  the  different  forms  of  currency,  it  was  found  necessary 
to  issue  bonds  with  which  to  acquire  gold  to  replenish  the  gold  reserve. 
There  is  no  one  issue  of  bonds  which  may  betaken  as  a  good  basis  for  this 
period.  Ten-year  5sweresoldin  February,  1894,at  117.22,  a3%basis  of 
income.  They  advanced  to  120.  A  further  issue  in  November  carried 
the  price  back  to  \\1}4.  In  the  following  February  4s  of  1925  were 
sold  on  a  3K%  basis,  at  104.49.  They  immediately  advanced,  selling 
up  to  123^.  An  additional  issue  in  January,  1896,  was  made  at  111.166. 
Quotations  for  both  the  5s  and  the  4s  were  depressed  during  that  year, 
the  5s  selling  as  low  as  108 >£  and  the  4s  at  1 1 1  %,  but  in  1897  the  4s  sold 
up  to  12954  and  the  5s  to  115^. 

THE  SPANISH  WAR  OF  1898 
The  war  loan  of  this  period  was  a  3%  issue  which  was  placed  at  100, 
and  immediately  advanced  to  a  premium.  The  following  is  a  statement 
compiled  by  the  Government  Actuary  showing  the  average  price  at 
which  these  bonds  sold  from  1898  to  1901.  In  1898,  105.31;  in  1899, 
108.20;  in  1900,  109.72;  and  in  1901,  109.34. 

PRICES  ADVANCE  AFTER  EVERY  CRISIS 
It  will  thus  be  seen  that  in  every  instance  after  the  crisis  was  passed 
the  bonds  have  advanced  in  a  marked  degree.    There  is  every  reason  to 
expect  that  such  will  be  the  case  with  the  Liberty  issues. 


Bankers  Trust  Company's  Tables 

of 
Liberty  Bond  and  Note  Values 


3^/2  %     Bond — Interest  payable  semi-annually 

RATES  OF  INTEREST  REALIZED 

if  purchased  at  prices  indicated  and  held  to  maturity 

Price 
105.0 

YEARS  TO  RUN 

Price 
105.0 

10 

10H 

11 

uy2 

12 

3.00 

12^ 
3.02 

13 

3.03 

13M 

25 
3.21 

25  H 
3.21 

26 
3.22 

26}  i 
3.22 

27 

3.22 

27^ 
3.22 

28 
3.23 

3.05 

104.9 

3.01 

3.03 

3.04 

3.06 

3.21 

3.22 

3.22 

3.22 

3.23 

3.23 

3.23 

104.9 

104.8 

3.00 

3.02 

3.04 

3.05 

3.07 

3.22 

3  22 

3.23 

3.23 

3.23 

3.23 

3.24 

104.8 

104.7 

3.00 

3.01 

3.03 

3.05 

3.06 

3.07 

3.23 

3  23 

3.23 

3.23 

3.24 

3.24 

3.24 

104.7 

104.6 

3.01 

3.02 

3.04 

3.05 

3.07 

3.08 

3.23 

3.24 

3.23 

3.24 

3.24 

3.25 

3.25 

104.6 

104.5 

3.00 

3.02 

3.03 

3.05 

3.06 

3.08 

3.09 

3.24 

3.24 

3.24 

3.25 

3.25 

3.25 

3.25 

104.5 

104.4 

3.01 

3.03 

3.04 

3.06 

3.07 

3.09 

3.10 

3.24 

3.25 

3.25 

3.25 

3.25 

3.26 

3.26 

104.4 

104.3 

3.00 

3.02 

3.04 

3.  or. 

3.07 

3.08 

3.10 

3.10 

3.25 

3.25 

3.26 

3.26 

3.26 

3.26 

3.26 

104.3 

104.2 

3.01 

3.03 

3.05 

3.06 

3.08 

3.09 

3.10 

3.12 

3.25 

3.26 

3.26 

3.26 

3.27 

3.27 

3.27 

104.2 

104.1 

3.02 

3.04 

3.06 

3.07 

3.09 

3.10 

3.11 

3.13 

3.26 

3.26 

3.27 

3.27 

3.27 

3.27 

3.27 

104.1 

104.0 

3.03 

3.05 

3.07 

3.08 

3.10 

3.11 

3.12 

3.13 

3.27 

3.27 

3.27 

3.27 

3.28 

3.28 

3.28 

104.0 

103.9 

3.05 

3.06 

3.08 

3.09 

3.11 

3.12 

3.13 

3.14 

3.27 

3.27 

3.28 

3.28 

3.28 

3.28 

3.29 

103.9 

103.8 

3.06 

3.07 

3.09 

3.10 

3.12 

3.13 

3.14 

3.15 

3.28 

3.28 

3.28 

3.28 

3.29 

3.29 

3.29 

103.8 

103.7 

3.07 

3.09 

3.10 

3.11 

3.13 

3.14 

3.15 

3.16 

3.28 

3.28 

3.29 

3.29 

3.29 

3  29 

3.20 

103.7 

103.6 

3.08 

3.10 

3.11 

3.12 

3.14 

3.15 

3.16 

3.17 

3.29 

3.29 

3.29 

3.30 

3.30 

3.30 

3.30 

103.6 

103.5 

3.09 

3.11 

3.12 

3.14 

3.15 

3.16 

3.17 

3.18 

3.29 

3.30 

3.30 

3.30 

3.30 

3.31 

3.31 

103  5 

103.4 

3.10 

3  12 

3.13 

3.15 

3.16 

3.17 

3.18 

3.19 

3.30 

3.30 

3.30 

3.31 

3.31 

3.31 

3.31 

103.4 

103.3 

3.11 

3.13 

3.14 

3.16 

3.17 

3   18 

3.19 

3.20 

3.31 

3.31 

3.31 

3.31 

3.31 

3.32 

3.32 

103.3 

103.2 

3.13 

3.14 

3.15 

3.17 

3.18 

3.19 

3.20 

3.21 

3.31 

3.31 

3.31 

3.32 

3.32 

3.32 

3.32 

103.2 

103.1 

3.14 

3.15 

3.16 

3.18 

3.19 

3.20 

3.21 

3.22 

3.32 

3.32 

3.32 

3.32 

3.32 

3.33 

3.33 

103.1 

103  0 

3.15 

3.16 

3.17 

3  19 

3.20 

3.21 

3.22 

3.22 

3  32 

3.32 

3.33 

3.33 

3.33 

3.33 

3.33 

103  0 

102.9 

3.16 

3.17 

3.18 

3.20 

3.21 

3.22 

3.23 

3.23 

3.33 

3.33 

3.33 

3.33 

3.34 

3  34 

3.34 

102.9 

102.8 

3.17 

3.18 

3.20 

3.21 

3.22 

3.23 

3.23 

3.24 

3.33 

3.34 

3.34 

3.34 

3.34 

3.34 

3.35 

102.8 

102.7 

3.18 

3.20 

3.21 

3.22 

3.23 

3.2413.24 

3.25 

3.34 

3  34 

3.34 

3 .  35 

3.35 

3.35 

3.35 

102.7 

102.6 

3.19 

3.21 

3.22 

3.23 

3.24 

3.25 

3.25 

3.26 

3.35 

3.35 

3.35 

3.35 

3  35 

3.35 

3.36 

102.6 

102.5 

3.21 

3.22 

3.23 

3.24 

3.25 

3.26 

3.26 

3.27 

3.35 

3.35 

3.36 

3.36 

3.36 

3.36 

3.36 

102.5 

102.4 

3.22 

3.23 

3.24 

3.25 

3.26 

3.26 

3.27 

3.2S 

3  36 

3.36 

3.36 

3.36 

3.36 

3  37 

3  37 

102.4 

102.3 

3.23 

3.24 

3.25 

3.26 

3.27 

3.27 

3.28 

3.29 

3.36 

3.37 

3.37 

3.37 

3.37 

3  37 

3  37 

102.3 

102.2 

3.24 

3.25 

3.26 

3.27 

3.28 

3.28 

3.29 

3.30 

3.37 

3.37 

3.37 

3.37 

3  37 

3.38 

3.38 

102.2 

102.1 

3.25 

3.26 

3.27 

3.28 

3.29 

3.29 

3.30 

3.31 

3.38 

3.38 

3.38 

3.38 

3.38 

3.38 

3.38 

102.1 

102.0 

3.26 

3.27 

3.28 

3.29 

3.30 

3.30 

3.31 

3.31 

3  38 

3.38 

3.38 

3.39 

3.39 

3.39 

3.39 

102.0 

101.9 

3.28 

3.29 

3.29 

3.30 

3.31 

3.31 

3.32 

3  32 

3.39 

3.39 

3  39 

3  39 

3  39 

3.39 

3.40 

101.9 

101.8 

3.29 

3.30 

3.30 

3.31 

3.32 

3.32 

3.33 

3.33 

3.39 

3.40 

3.40 

3  40 

3.40 

3  40 

3  40 

101  8 

101.7 

3.30 

3.31 

3.31 

3.32 

3.33 

3.33 

3.34 

3.34 

3.40 

3.40 

3.40 

3.40 

3  40 

3  40 

3.41 

101.7 

101.6 

3.31 

3.32 

3.32 

3.33 

3.34 

3.34 

3.35 

3.35 

3.41 

3.41 

3.41 

3.41 

3.41 

3.41 

3.41 

101.6 

101.5 

3.32 

3.33 

3.34 

3.34 

3.35 

3.35 

3.36 

3.36 

3.41 

3.41 

3.41 

3.41 

3  42 

3.42 

3  42 

101.5 

101.4 

3.33 

3.34 

3.35 

3.35 

3.36 

3.36 

3.37 

3.37 

3.42 

3.42 

3.42 

3.42 

3.42 

3.42 

3.42 

101.4 

101.3 

3.35 

3.35 

3.36 

3.36 

3.37 

3.37 

3.38 

3.3S 

3.42 

3.42 

3.42 

3.43 

3.43 

3.43 

3  43 

101.3 

101.2 

3.36 

3.36 

3.37 

3.37 

3.38 

3.38 

3.39 

3.39 

3.43 

3.43 

3.43 

3.43 

3.43 

3.43 

3.43 

101.2 

101.1 

3.37 

3.37 

3.38 

3. 38 

3.39 

3.39 

3.39 

3.40 

3.43 

3.43 

3.44 

3.44 

3.44 

3.44 

d.44 

101.1 

101.0 

3.38 

3.38 

3.39 

3.39 

3.40 

3.40 

3.40 

3.41 

3.44 

3.44 

3  44 

3  44 

3.44 

3.44 

3.44 

101.0 

100.9 

3.39 

3.40 

3.40 

3.40 

3.41 

3.41 

3.41 

3.42 

3.45 

3.45 

3.45 

3.45 

3.45 

3.45 

3.45 

100.9 

100.8 

3.40 

3.41 

3.41 

3.41 

3.42 

3.42 

3.42 

3.43 

3.45 

3.45 

3.45 

3.45 

3.46 

3  46 

3.46 

100.8 

100.7 

3.42 

3.42 

3.42 

3.42 

3.43 

3.43 

3.43 

3  44 

3.46 

3.40 

3.46 

3.46 

3.46 

3.4fi 

3.46 

100.7 

100.6 

3.43 

3.43 

3.43 

3.44 

3.44 

3.44 

3.44 

3.44 

3.46 

3.46 

3.47 

3.47 

3.47 

3.47 

3.47 

100.6 

100.5 

3.44 

3.44 

3.44 

3.45 

3.45 

3.45 

3.45 

3.45 

3.47 

3.47 

3.47 

3.47 

3.47 

3.47 

3.47 

100.5 

100.4 

3.45 

3.45 

3.40 

3.46 

3.46 

3.46 

3.40 

3.46 

3.48 

3.48 

3.48 

3.48 

3.48 

3.48 

3.48 

100.4 

100.3 

3.46 

3.47 

3.47 

3.47 

3.47 

3.47 

3.47 

3.47 

3.48 

3.48 

3.48 

3.48 

3.48 

3.48 

3.48 

100.3 

100.2 

3.48 

3.48 

3.48 

3.48 

3.48 

3.48 

3  48 

3.48 

3.49 

3.49 

3.49 

3.49 

3.49 

3.49 

3.49 

100.2 

100.1 

3.49 

3.49 

3.49 

3.49 

3.49 

3.49 

3.49 

3.49 

3.49 

3.49 

3.49 

3.49 

3.49 

3.4S 

3.49 

100.1 

100  0 

3.50 

3.50 

[3.50 

3.50 

3.50 

3.50 

3.50 

3.50 

3.50 

3.50 

3.50 

3.50 

3.50 

3.50 

3.50 

100.0 

108 


3V2%    Bond- 

—Interest  payable  semi-annually 

RATES  OF  INTEREST  REALIZED 

if  purchased  at  prices  indicated  and  held  to  maturity 

Price 
100.0 

YEARS  TO  RUN 

Price 

too  0 

10 
3.50 

10^2 

3.50 

11 
3.50 

11H 
3.50 

12 

3.50 

12H 

13 

3.50 

13M> 

1.50 

-'■■»', 

26   I26K 

27 
3.50 

27H 

28 

28H 
3.50 

3.50 

3  .  50 

3.50 

3.50 

3.50 

3.50 

99.9 

3.51 

3  51 

3.51 

3.51 

3.51 

3.51 

3.51 

3.51 

3.51 

3.51 

3.51 

3.51 

3.51 

3.51 

3.51 

99.9 

99.8 

3.53 

3.52 

3.52 

3.52 

3.52 

3.52 

3.52 

3.52 

3.51 

3.51 

3.51 

3.51 

3.51 

3.51 

3.51 

99.8 

99.7 

3.54 

3.53 

3.53 

3.53 

3.53 

3.53 

3.53 

3.53 

3.52 

3.52 

3.52 

3.52 

3.52 

3.52 

3.52 

99.7 

99.6 

3.55 

3.55 

3.54 

3.54 

3.54 

3.54 

3.54 

3.54 

3.52 

3.52 

3.52 

3.52 

3.52 

3.52 

3.52 

99.6 

99.5 

3.56 

3.56 

3.56 

.3.55 

3.55 

3.55 

3.55 

3.55 

3.53 

3.53 

3.53 

3.53 

3.53 

3.53 

3.53 

99.5 

99.4 

3.57 

3.57 

3.57 

3.56 

3.56 

3.56 

3.56 

3.56 

3.54 

3.53 

3.53 

3.53 

3.53 

3.53 

3.53 

99.4 

99.3 

3.58 

3.5S 

3.58 

3.58 

3.57 

3.57 

3.57 

3.50 

3.54 

3.54 

3.54 

3.54 

3.54 

3.54 

3.54 

99.3 

99.2 

3.60 

3.59 

3.59 

3.59 

3.58 

3.5S 

3.58 

3.57 

3.55 

3.55 

3.55 

3.55 

3.54 

3.54 

3.54 

99.2 

99.1 

3.61 

3.60 

3.60 

3.60 

3.60 

3.59 

3.59 

3.58 

3.55 

3.55 

3.55 

3.55 

3.55 

3.55 

3.55 

99.1 

99  0 

3.62 

3.62 

3.61 

3.61 

3.60 

3.60 

3.60 

3.59 

3.56 

3.56 

3.56 

3.56 

3.56 

3.56 

3.56 

99.0 

93. 9 

3.63 

3.63 

3.62 

3.62 

3.61 

3.61 

3.61 

3.60 

3.57 

3.56 

3.56 

3.56 

3.56 

3.56 

3.56 

98.9 

98.8 

3.64 

3.64 

3  63 

3.63 

3.62 

3.62 

3.62 

3.61 

3.57 

3.57 

3.57 

3.57 

3.57 

3.57 

3.57 

98.8 

98.7 

3.66 

3.65 

3.65 

3.64 

3.64 

3.63 

3.63 

3.62 

3.58 

3.5S 

3.58 

3.58 

3.57 

3.57 

3.57 

98.7 

93. 6 

3.67 

3.66 

3.66 

3.65 

3.65 

3.64 

3.64 

3.63 

3.58 

3.58 

3.58 

3.58 

3.58 

3.58 

3.58 

98.6 

98.5 

3.68 

3.67 

3.67 

3.66 

3.66 

3.65 

3.65 

3.64 

3.59 

3.59 

3.59 

3.59 

3.59 

3.59 

3.58 

98.5 

98.4 

3.69 

3 .  69 

3.6S 

3.67 

3.67 

3.66 

3.66 

3.65 

3.60 

3.59 

3.59 

3.59 

5.59 

3.59 

3.59 

98.4 

98.3 

3.71 

3.70 

3.69 

3 .  6S 

3.68 

3.67 

3.67 

3.66 

.3.60 

3.60 

3.60 

3.60 

3.60 

3.60 

3.60 

98.3 

98.2 

3.72 

3  71 

3.70 

3.69 

3.69 

3.68 

3.68 

3.67 

3.61 

3.61 

3.61 

3.60 

3.60 

3.60 

3.60 

98.2 

98.1 

3.73 

3.72 

3.71 

3.71 

3.70 

3.69 

3.69 

3.68 

3.61 

3.61 

3.61 

3.61 

3.61 

3.61 

3.61 

98.1 

98  0 

3.74 

3.73 

3.72 

3.72 

3.71 

3.70 

3.70 

3.69 

3.62 

3.62 

3  62 

3.62 

3.62 

3.61 

3.61 

98.0 

97.9 

3.75 

3.74 

3.74 

3.73 

3.72 

3.71 

3.71 

3.70 

3.63 

3.62 

3.62 

3 .  62 

3.62 

3.62 

3.62 

97.9 

97.8 

3.77 

3.76 

3.75 

3.74 

3.73 

3.72 

3.72 

3.71 

3.63 

3.63 

3.63 

3 .  63 

3.63 

3.63 

3.62 

97.8 

97.7 

3.78 

3.77 

.3.76 

3.75 

3.74 

3.73 

3.73 

3.72 

3.04 

3.64 

3.64 

3.63 

3.63 

3.63 

3.63 

97.7 

97.6 

3.79 

3.78 

3.77 

3.76 

3.75 

3.74 

3.74 

3.73 

3.64 

3.64 

3.64 

3.64 

3.64 

3.64 

3.64 

97.6 

97.5 

3.80 

3.79 

3.78 

3.77 

3.76 

3.75 

3.75 

3.74 

3.65 

3.65 

3.65 

3.65 

3.65 

3.64 

3.64 

97.5 

97.4 

3.S2 

3.80 

3.79 

3.78 

3.77 

3.76 

3.75 

3.75 

3.66 

3.66 

3.65 

3.65 

3.65 

3.65 

3.65 

97.4 

97.3 

3.83 

3.81 

3.80 

3.79 

3.78 

3.77 

3.76 

3.76 

3.66 

3.66 

3.66 

3.66 

3.66 

3.65 

3.65 

97.3 

97.2 

3.84 

3.83 

3.82 

3.80 

3.79 

3.78 

3.77 

3.77 

3.67 

3.67 

3.67 

3.66 

3.66 

3.66 

3.66 

97.2 

97.1 

3.85 

3.84 

3.83 

3.82 

3.80 

3.79 

3.78 

3.78 

3.68 

3.67 

3.67 

3.67 

3.67 

3.67 

3.66 

97.1 

97.0 

3.86 

3.85 

3.84 

3.83 

3.81 

3.80 

3.79 

3.79 

3.68 

3.6S 

3.68 

3.6S 

3.67 

3.67 

3.67 

97.0 

96.9 

3.88 

3.86 

3 .  85 

3.84 

3.82 

3.81 

3.80 

3.80 

3.69 

3.69 

3.68 

3.68 

3.68 

3.68 

3.68 

96.9 

96.8 

3.89 

3.87 

3.86 

3.85 

3.84 

3.82 

3.81 

3.81 

3.69 

3.69 

3.69 

3.69 

3.69 

3.68 

3.68 

96.8 

96.7 

3.90 

3.89 

3.87 

3.86 

3.85 

3.84 

3.82 

3.82 

3.70 

3.70 

3.70 

3.69 

3.69 

3.69 

3.69 

96.7 

96.6 

3.91 

3.90 

3,88 

3.87 

3.86 

3.85 

3.83 

3.83 

3.71 

3.70 

3.70 

3.70 

3.70 

3.70 

3.69 

96.6 

96.5 

3  93 

3.91 

3.90 

3.88 

3.87 

3.86 

3.85 

3.84 

3.71 

3.71 

3.71 

3.71 

3.70 

3.70 

3.70 

96.5 

96.4 

3.94 

3.92 

3.91 

3.89 

3.88 

3.87 

3.86 

3.84 

3.72 

3.72 

3.71 

3.71 

3.71 

3.71 

3.71 

96.4 

96.3 

3.95 

3.93 

3.92 

.3.90 

3.89 

3.88 

3.87 

3.85 

3.73 

3.72 

3.72 

3  72 

3.72 

3.71 

3.71 

96.3 

96.2 

3.96 

3.95 

3 . 9.3 

3.91 

3.90 

3.89 

3.88 

3.86 

3.73 

3.73 

3.73 

3.72 

3.72 

3.72 

3  72 

96.2 

96.1 

3.98 

3.96 

3.94 

3.93 

3.91 

3.90 

3.89 

3.67 

3.74 

3.74 

3.73 

3.73 

3.73 

3.73 

3.72 

96.1 

9C  0 

3.99 

3.97 

3  95 

3.94 

3.92 

3.91 

3.90 

3.88 

3.74 

3.74 

3.74 

3.74 

3.73 

3.73 

3.73 

96  0 

95.9 

4.00 

3.98 

3.96 

3 .  95 

3.93 

3.92 

3.91 

3.89 

3.75 

3.75 

3.74 

3.74 

3.74 

3.74 

3  74 

95.9 

95.8 

3.99 

3.98 

3.96 

3.94 

3.93 

3.92 

3.90 

3.76 

3.75 

3.75 

3.75 

3.75 

3.74 

3.74 

95.8 

95.7 

4.01 

3.99 

3.97 

3.95 

3.94 

3.93 

3.91 

3.76 

3.76 

3.76 

3.75 

3.75 

3.75 

3.75 

95.7 

95.6 

4.00 

3.98 

3.97 

3.95 

3.94 

3.92 

3.77 

3.77 

3.76 

3.76 

3.76 

3.7t 

3.75 

95.6 

95.5 

3.99 

3.98 

3.96 

3.95 

3.93 

3.78 

3.77 

3.77 

3.77 

3.76 

3.76 

3.76 

95.5 

95.4 

4.00 

3.99 

3.97 

3.96 

3.94 

3.78 

3.78 

3.78 

3.77 

3.77 

3.77 

3.76 

95.4 

95.3 

4.00 

3.98 

3.97 

3.95 

3.79 

3.79 

3.78 

3.78 

3.78 

3.77 

3.77 

95  3 

95.2 

3.99 

3.98 

3.96 

3.80 

3.79 

3.79 

3.78 

3.78 

3  78 

3.78 

95.2 

95.1 

4.00 

3.99 

3.97 

3.80 

3  80 

3.79 

3.79 

3.79 

3.78 

3.78 

95.1 

95.(1 

4.00 

3.98 

3.81 

3.80 

3. SO 

3.80 

3.79 

3.79 

3.79 

95.0 

109 


3%  %     Bond — Interest  payable  semi-annually 
RATES  OF  INTEREST  REALIZED 

if  purchased  at  prices  indicated  and  held  to  maturity 


PERIOD  TO  RUN 

Price 

1 

2 

4 

6 

8 

10 

Price 

mo. 
3'72 

mos. 
3*73 

mos. 
3*74 

mos. 

mos. 
3*74 

mos. 
3.75 

1 

Hi 

3.75 

2 

3.75 

2H 

3 

334 

4 

3.75 

4H 

S    i 
3.75 

100  0 

3.75 

3.75 

3.75 

3.75 

3.75 

3.75 

100  0 

99.9 

4.93 

4.33 

4.04 

3.95 

3.90 

3.87 

3.85 

3.82 

3.80 

3.79 

3.79 

3.78 

3.78 

3.77 

3.77 

99.9 

99.8 

6.14 

4.94 

4.35 

4.16 

4.05 

3.99 

3.96 

3.89 

3.85 

3  83 

3.82 

3.81 

3.80 

3.80 

3.79 

99.8 

99.7 

5.55 

4.65 

4.36 

4.20 

4.11 

4.06 

3.96 

3.91 

3.88 

3.86 

3.84 

3.83 

3.82 

3.82 

99.7 

99.6 

4.96 

4.57 

4.36 

4.24 

4.16 

4.03 

3.96 

3.92 

3.89 

3.87 

3.86 

3.85 

3.84 

99.6 

99.5 

5.27 

4.77 

4.51 

4.36 

4.27 

4.10 

4.01 

3.96 

3.93 

3.90 

3.89 

3.87 

3. 86' 

99.5 

99.4 

4.98 

4.67 

4.49 

4.37 

4.17 

4.06 

4.00 

3.96 

3.94 

3.91 

3.90 

3.88 

99.4 

99.3 

5.19 

4.82 

4.61 

4.47 

4.24 

4.12 

4.05 

4.00 

3.97 

3.94 

3.92 

3.90 

99.3 

99.2 

5.39 

4.98 

4.73 

4.58 

4.31 

4.17 

4.09 

4.04 

4.00 

3.97 

3.95 

3.93 

99.2 

99.1 

5.13 

4.86 

4.68 

4.38 

4.22 

4.13 

4.07 

4.03 

4.00 

3.97 

3.95 

99.1 

99  II 

5.29 

4.9S 

4.79 

4.45 

4.28 

4.18 

4.11 

4.06 

4.02 

3.99 

3.97 

99  0 

98.9 

5.11 

4.89 

4.52 

4.33 

4.22 

4.14 

4.09 

4.05 

4.02 

3.99 

98.9 

98.8 

5.23 

5.00 

4.59 

4.38 

4.26 

4.18 

4.12 

4.08 

4.04 

4.02 

98.8 

98.7 

5.36 

5.10 

4.66 

4.44 

4.30 

4.22 

4.15 

4.11 

4.07 

4.04 

98.7 

98.6 

5.21 

4.73 

4.49 

4.35 

4.25 

4.18 

4.13 

4.09 

4.06 

98.6 

98.5 

5.31 

4.80 

4.54 

4.39 

4.29 

4.22 

4.16 

4.12 

4.08 

98.5 

98.4 

4.87 

4.60 

4.43 

4.32 

4.25 

4.19 

4.14 

4.11 

98.4 

98.3 

4.94 

4.65 

4.48 

4.36 

4.28 

4.22 

4.17 

4.13 

98.3 

98.2 

5.01 

4.70 

4.52 

4.40 

4.31 

4.24 

4.19 

4.15 

98.2 

98.1 

5.08 

4.76 

4.56 

4.43 

4.34 

4.27 

4.22 

4.18 

98.1 

98  0 

5.15 

4.81 

4.61 

4.47 

4.37 

4.30 

4.24 

4.20 

98  0 

97.9 

5.22 

4.86 

4.65 

4.51 

4.40 

4.33 

4.27 

4.22 

97.9 

97.8 

5.30 

4.92 

4.69 

4.54 

4.44 

4.36 

4.29 

4.24 

97.8 

97.7 

4.97 

4.74 

4.58 

4.47 

4.38 

4.32 

4.27 

97.7 

97.6 

5.03 

4.78 

4.62 

4.50 

4.41 

4.34 

4.29 

97.6 

97.6 

5.08 

4.82 

4.65 

4.53 

4.44 

4.37 

4.31 

97.5 

97.4 

5.13 

4.87 

4.69 

4.56 

4.47 

4.39 

4.33 

97.4 

97.3 

5.19 

4.91 

4.73 

4.59 

4.50 

4.42 

4.36 

97.3 

97.2 

5.24 

4.95 

4.76 

4.63 

4.52 

4.44 

4.38 

97.2 

97.1 

5.30 

5.00 

4.80 

4.66 

4.55 

4.47 

4.40 
| 

97.1 

97  0 

5.04 

4.84 

4.69 

4.58 

4.49 

4.43 

97.0 

96.9 

5.09 

4.87 

4.72 

4.61 

4.62 

4.45 

96.9 

96.8 

5.13 

4.91 

4.75 

4.64 

4.54 

4.47 

96.8 

96.7 

5.17 

4.95 

4.79 

4.66 

4.57 

4.49 

96.7 

96.6 
96.5 

5.22 
5.2C 

4.98 
5.02 

4.82 
4.85 

4.69 
4.72 

4.59 
4.62 

4.52 
4.54 

96.6 
96.5 

96.4 
96.3 
96.2 
96.1 

When  the  interval  between  the 
date  of  purchase  and  the  due  date 
of  the  next  coupon  is  leas  than  6 
months,  the  rate  realized  is  less 

5.06 
5.10 
5.13 
5.17 

4.88 
4.91 
4.95 
4.98 

4.75 
4.78 
4.81 
4.83 

4.65 
4.67 
4.70 
4.72 

4.56 
4.59 
4.61 
4.63 

| 

96.4 
96.3 
96.2 
96.1 

96  0 

95.9 

than  the  bond  rate   because   the 
purchase   price   (par)    has    been 

5.21 
5.25 

5  01 
5.04 

4.86 
4.89 

4.75 

4.77 

4.66 
4.68 

96  0 

95.9 

95.8 

increased  by  accrued  interest. 

5.07 

4.92 

4.80 

4.70 

95.8 

95  7 

5.11 

5.14 

4.95 
4.98 

4.82 
4.85 

4.73 
4.76 

95.7 

96.6 

95.6 

95.6 

5.17 

5.00 

4  88 

4.77 

95.5 

95.4 

5.20 

5.03 

4.90 

4  80 

95.4 

98  3 

5.24 

5.06 

4.93 

4.82 

95.3 

95.2 

5.27 

5.09 

4.95 

4.84 

95.2 

95.1 

5.12 

4.98 

4.S6 

95.1 

95.0 

1 

5.15| 

5.0o| 

4.89 

95  6 

110 


3%   Bond — Interest  payable  semi-annually 

RATES  OF  INTEREST  REALIZED 

if  purchased  at  prices  indicated  and  held  to  maturity 

Price 

PERIOD  TO  RUN 

Price 

1 

2 

4 

6 

8 

10 

mo. 

mos. 

mos. 

mos. 

mos. 

mos. 

1 

IK 

2 

2H 

3 

3K 

4 

m 

5 

105.0 

10.V0 

104.9 

104.9 

104.8 

104.8 

104.7 

104.7 

104.6 

104.6 

104.5 

104.5 

104.4 

104.4 

104.3 

104.3 

104.2 

104.2 

104.1 

When  the  interval  between  the  date  of  purchase 
and  the  due  date  of  the  next  coupon  is   less   than   6 

104.1 

104.0 

months,  the  rate  realized   is  less  than  the  bond  rate 

104.0 

103.9 

because  the  purchase  price    (par)  has  been  increased 

103  9 

103.8 
103.7 

by  accrued  interest. 

103.8 
103.7 

103.6 
103.5 

2.99 

103.6 
103.5 

103.4 

3.01 

103.4 

103.3 

3.03 

103.3 

103.2 

2.98 

3.06 

103.2 

103.1 

3.01 

3.08 

103.1 

103  0 

3.03 

3.10 

103  0 

102.9 

3.06 

3.12 

102.9 

102.8 

3.00 

3. OS 

3  14 

102.8 

102.7 

3.03 

3.10 

3.16 

102.7 

102.6 

3.06 

3.13 

3.18 

102.6 

102.5 

2.99 

3.08 

3.15 

3.20 

102.5 

102.4 

3.02 

3.11 

3.17 

3.23 

102.4 

102.3 

3.05 

3.13 

3.20 

3.25 

102.3 

102.2 

2.98 

3.08 

3.16 

3.22 

3.27 

102.2 

102.1 

3.01 

3.11 

3.19 

3.24 

3.29 

102.1 

102.0 

3.05 

3.14 

3.21 

3.27 

3.31 

102.0 

101.9 

3.08 

3.17 

3.24 

3.29 

3.33 

101.9 

101.8 

3.00 

3.12 

3.20 

3.27 

3.32 

3.36 

101.8 

101.7 

3.04 

3.15 

3.23 

3.29 

3.34 

3.38 

101.7 

101.6 

3.08 

3.19 

3.26 

3.32 

3.36 

3.40 

101.6 

101.5 

2.97 

3.12 

3.22 

3.29 

3.35 

3.39 

3.42 

101.5 

101.4 

3.02 

3.16 

3.26 

3.32 

3.37 

3.41 

3.44 

101.4 

101.3 

3.08 

3.21 

3.29 

3.35 

3  40 

3.44 

3.46 

101.3 

101.2 

3.13 

3.25 

3.33 

3.38 

3.43 

3.46 

3.49 

101.2 

101.1 

2.99 

3.18 

3.29 

3.36 

3.41 

3.45 

3.48 

3.61 

101.1 

101.0 

3.06 

3.23 

3.33 

3.40 

3.44 

3.48 

3.51 

3.53 

101  0 

100.9 

3.13 

3.28 

3.37 

3.43 

3.47 

3.51 

3.53 

3.55 

100.9 

100.8 

2.93 

3.20 

3.33 

3.41 

3  47 

3.50 

3.53 

3.56 

3.57 

100.8 

100.7 

2.89 

3.03 

3.27 

3.39 

3.46 

3.50 

3.54 

3.56 

3.58 

3.60 

100.7 

100.6 

3.01 

3.14 

3.34 

3.44 

3.50 

3.54 

3.57 

3.59 

3.60 

3.62 

100.6 

100.5 

2.98 

3.13 

3.24 

3.41 

3.49 

3.54 

3.57 

3.60 

3.61 

3.63 

3.64 

100.5 

100.4 

2.94 

3.13 

3.26 

3.34 

3.47 

3.54 

3.58 

3.61 

3.63 

3.64 

3.65 

3.66 

100.4 

100.3 

2.83 

3.14 

3.29 

3.38 

3.44 

3.54 

3.59 

3.62 

3.64 

3.66 

3.67 

3.68 

3.68 

100.3 

100.2 

2.52 

3.13 

3.34 

3.44 

3.50 

3.55 

3.61 

3.65 

3.67 

3.68 

3.69 

3.70 

3.70 

3.71 

100.2 

100.1 

2.52 

3.12 

3.43 

3.55 

3.59 

3.62 

3.65 

3.68 

3.70 

3.71 

3.71 

3.72 

3.72 

3.73 

3.73 

100.1 

100  0 

3*72 

3*73 

3*74 

3.75 

3*74 

3.75 

3.75 

3.75 

3.75 

3.75 

3.75 

3.75 

3.75 

3.75 

3.75 

100  0 

111 


4  %    Bond— Interest  payable  semi-annually 

RATES  OF  INTEREST  REALIZED 

if  purchased  at  prices  indicated  and  held  to  maturity 

Price 
100  0 

YEARS  TO  RUN 

Price 
100  0 

6 
4.00 

6H 
4  00 

7 
4.00 

4  00 

8 

8H 
4.00 

9 
4.00 

Wi 

10 

4.00 

10H 
4.00 

11 

4.00 

4.00 

12 
4.00 

12H 
4.00 

13 

4.00 

4.00 

4.00 

99.9 

4.02 

4.02 

4.02 

4.02 

4.01 

4.01 

4.01 

4.01 

4.01 

4.01 

4.01 

4.01 

4.01 

4.01 

4.01 

99.9 

99.8 

4.04 

4.04 

4.03 

4.03 

4.03 

4.03 

4.03 

4.03 

4.02 

4.02 

4.02 

4.02 

4.02 

4.02 

4.02 

99.8 

99.7 

4.06 

4.05 

4.05 

4.05 

4.04 

4.04 

4.04 

4.04 

4.04 

4.04 

4.03 

4.03 

4.03 

4.03 

4.03 

99.7 

99.6 

4.08 

4.07 

4.07 

4.00 

4.06 

4.06 

4.05 

4.05 

4.05 

4.05 

4.05 

4.04 

4.04 

4.04 

4.04 

99.6 

99.5 

4.10 

4.09 

4.08 

4.08 

4.07 

4.07 

4.07 

4.06 

4.06 

4.06 

4.06 

4.06 

4.05 

4.05 

4.05 

99.5 

99.4 

4.11 

4.11 

4.10 

4.09 

4.09 

4.08 

4.08 

4.08 

4.07 

4.07 

4.07 

4.07 

4.06 

4.06 

4.06 

99.4 

99.3 

4.13 

4.12 

4.12 

4.11 

4.10 

4.10 

4.09 

4.09 

4.09 

4.08 

4.08 

4. OS 

4.07 

4.07 

4.07 

99.3 

99.2 

4.15 

4.14 

4.13 

4.12 

4.12 

4.11 

4.11 

4.10 

4.10 

4.09 

4.09 

4.09 

4.08 

4.08 

4.08 

99.2 

99.1 

4.17 

4.16 

4.15 

4.14 

4.13 

4.13 

4.12 

4.12 

4.11 

4.11 

4.10 

4.10 

4.10 

4.09 

4.09 

99.1 

99  0 

4.19 

4.18 

4.17 

4.16 

4.15 

4.14 

4.13 

4.13 

4.12 

4.12 

4.11 

4.11 

4.11 

4.10 

4.10 

99  6 

9S.9 

4.21 

4.20 

4.18 

4.17 

4.16 

4.15 

4.15 

4.14 

4.13 

4.13 

4.13 

4.12 

4.12 

4.11 

4.11 

98.9 

98.8 

4.23 

4.21 

4.20 

4.19 

4.18 

4.17 

4.16 

4.15 

4.15 

4.14 

4.14 

4.13 

4.13 

4.12 

4.12 

98.8 

98.7 

4.25 

4.23 

4.22 

4.20 

4.19 

4.18 

4.17 

4.17 

4.16 

4.15 

4.15 

4.14 

4.14 

4.13 

4.13 

98.7 

98.6 

4.27 

4.25 

4.23 

4.22 

4.21 

4.20 

4.19 

4.18 

4.17 

4.17 

4.16 

4.15 

4.15 

4.14 

4.14 

98.6 

98.5 

4.29 

4.27 

4.25 

4.24 

4.22 

4.21 

4.20 

4.19 

4.19 

4.18 

4.17 

4.17 

4.16 

4.16 

4. IB 

98.5 

08.4 

4.31 

4.29 

4.27 

4.25 

4.24 

4.23 

1.22 

4.21 

4.20 

4.19 

4.18 

4.18 

4.17 

4.17 

4.16 

98.4 

98.3 

4.32 

4.30 

4.29 

4.27 

4.25 

4.24 

4.23 

4.22 

4.21 

4.20 

4.20 

4.19 

4.18 

4.18 

4.17 

98.3 

98.2 

4.34 

4.32 

4.30 

4.28 

4.27 

4.25 

4.24 

4.23 

4  .22 

4.21 

4.21 

4.20 

4.19 

4.19 

4.18 

98.2 

98.1 

4.36 

4.34 

4.32 

4.30 

4.28 

4.27 

4.26 

4.25 

4^24 

4.23 

4.22 

4.21 

4.20 

4.20 

4.19 

98.1 

98.0 

4.38 

4.36 

4.34 

4.31 

4.30 

4.28 

4.27 

4.26 

4.25 

4.24 

4.23 

4.22 

4.21 

4.21 

4.20 

98  0 

97.9 

4.40 

4.38 

4.35 

4.33 

4.31 

4.30 

4.28 

4.27 

4.26 

4.25 

4.24 

4.23 

4.23 

4.22 

4.21 

97.9 

97.8 

4.42 

4.39 

4.37 

4.35 

4.33 

4.31 

4.30 

4  2S 

4.27 

4.26 

4.25 

4.24 

4.24 

4.23 

4.22 

97.8 

97.7 

4.44 

4.41 

4.39 

4.36 

4.34 

4.33 

4.31 

4.30 

4.29 

4.27 

4.27 

4.26 

4.25 

4.24 

4.23 

97.7 

97.6 

4.40 

4.43 

4.40 

4.38 

4.36 

4.34 

4.33 

4.31 

4.30 

4.29 

4.28 

4.27 

4.26 

4.25 

4.24 

97.6 

97.5 

4.48 

4.45 

4.42 

4.40 

4.37 

4.35 

4.34 

4.32 

4.31 

4.30 

4.29 

4.28 

4.27 

4.26 

4.25 

97.5 

97.4 

4.50 

4.47 

4.44 

4.41 

4.39 

4.37 

4.35 

4.34 

4.32 

4.31 

4.30 

4.29 

4.28 

4.27 

4.26 

97.4 

97.3 

4.52 

4.48 

4.45 

4.43 

4.40 

4.38 

4.37 

4.35 

4.34 

4.32 

4.31 

4.30 

4.29 

4.28 

4.27 

97.3 

97.2 

4.54 

4.50 

4.47 

4.44 

4.42 

4.40 

4.38 

4.36 

4.35 

4.34 

4.32 

4.31 

4.30 

4.29 

4.28 

97.2 

97.1 

4.56 

4.52 

4.49 

4.46 

4.43 

4.41 

4.39 

4.38 

4.36 

4.35 

4.34 

4.32 

4.31 

4.30 

4.29 

97.1 

97.0 

4.58 

4.54 

4.50 

4.48 

4.45 

4.43 

4.41 

4.39 

4.37 

4.36 

4.35 

4.34 

4.32 

4.31 

4.30 

97  0 

90.9 

4.60 

4.56 

4.52 

4.49 

4.47 

4.44 

4.42 

4.40 

4.39 

4.37 

4.36 

4.35 

4.34 

4.32 

4.31 

96.9 

90.8 

4.62 

4.57 

4.54 

4.51 

4.48 

4.46 

4.44 

4.42 

4.40 

4.38 

4.37 

4.36 

4.36 

4.34 

4.32 

96.8 

96.7 

4.64 

4.59 

4  50 

4.52 

4.50 

4.47 

4.45 

4.43 

4.41 

4.40 

4.3S 

4.37 

4.36 

4.35 

4.34 

96.7 

96 . 6 

4.66 

4.61 

4.57 

4.54 

4.51 

4.49 

4.46 

4.44 

4.43 

4.41 

4.40 

4.38 

4.37 

4.36 

4.35 

96.6 

90.5 

4.68 

4.63 

4.59 

4.56 

4.53 

4.50 

4.48 

4.40 

4.44 

4.42 

4.41 

4.39 

4.38 

4.37 

4.36 

96.5 

96.4 

4.70 

4.65 

4.61 

4.57 

4.54 

4.51 

4.49 

4.47 

4.45 

4.43 

4.42 

4.40 

4.39 

4.38 

4.37 

96.4 

96  3 

4  .  72 

4  07 

4  62 

4.59 

4.56 

4.53 

4.51 

4.48 

4.40 

4.45 

4.43 

4.42 

4.40 

4.39 

4.38 

96.3 

96.2 

4 .  73 

4.69 

4.64 

4.60 

4.57 

4.54 

4.52 

4.50 

4.48 

4.46 

4.44 

4.43 

4.41 

4.40 

4.39 

96.2 

96 . 1 

4.75 

4.70 

4.60 

4.62 

4.59 

4.56 

4.53 

4.51 

4.49 

4.47 

4.45 

4.44 

4.42 

4.41 

4.40 

96.1 

90  0 

4.77 

4.72 

4.68 

4.64 

4.60 

1   57 

4.55 

4.52 

4.50 

4.48 

4.47 

4.45 

4.43 

4.42 

4.41 

90.0 

95.9 

4.79 

4.74 

4.69 

4  65 

4.62 

4.59 

4.56 

1  54 

4.51 

4.50 

4.48 

4.46 

4.45 

4.43 

4.42 

95.9 

95.8 

4.81 

4 .  70 

4.71 

4.67 

4  63 

1   00 

4.58 

1 .  55 

4.53 

4.51 

4.49 

4.47 

4.40 

4.44 

4.43 

95.8 

96 . 7 

4.83 

4.7S 

4.73 

4.69 

4.65 

4.62 

4.59 

4.56 

4.54 

4.52 

4  50 

4.48 

4.47 

4.45 

4.44 

95.7 

95.6 

4.85 

4.80 

4.75 

4.70 

4.66 

4.63 

4.60 

4.58 

4.55 

4.53 

4.51 

4.50 

4.48 

4.46 

4.45 

95.6 

95.5 

4.87 

4.81 

4.7G 

4.72 

4.68 

4.65 

4.62 

4.59 

4.57 

4.55 

4.53 

4.51 

4.49 

4.47 

4.46 

95.5 

95.4 

4.89 

4.83 

4.78 

4.74 

4.70 

4.60 

4.03 

4.60 

4.58 

4.56 

4  .  54 

4.52 

4.50 

4.48 

4.47 

95.4 

95  3 

4.91 

4.85 

4.80 

4  .  75 

4.71 

4.68 

1.65 

4.62 

4 .  59 

4.57 

1 .  55 

4.53 

4.51 

4.50 

4.48 

95.3 

95 . 2 

1  93 

4.87 

4.82 

4.77 

4.73 

1.69 

4.66 

4.03 

4.60 

4.58 

4.56 

4.54 

5.52 

4.51 

4.49 

95.2 

95.1 

4.95 

4.89 

4.83 

4.79 

4.74 

4.71 

4.67 

4.04 

4.02 

4.59 

4.57 

4.55 

4.53 

4.52 

4.50 

95.1 

95.0 

4.97 

4.91 

4.85 

4.80 

4.76 

4.72 

4.69 

4.00 

4.63 

4.61 

4.58 

4.56 

4.55 

4.53 

4.51 

95.0 

112 


4  %    Bond — Interest  payable  semi-annually 

RATES  OF  INTEREST  REALIZED 

if  purchased  at  prices  indicated  and  held  to  maturity 

Price 
100.0 

YEARS  TO  RUN 

Price 

too  0 

21 
4.00 

21H 

22 
4.00 

22^ 
4.00 

23 
4.00 

233^ 
4.00 

24 
4.00 

24.i'6 

25 
4.00 

25', 
4.00 

26 
4.00 

26 '  2 

27 
4.00 

27M 
4.00 

28 

4.00 

4.00 

4.00 

4.00 

99.9 

4.01 

4.01 

4.01 

4.01 

4.01 

4.01 

4.01 

4.01 

4.01 

4.01 

4.01 

4.01 

4.01 

4.01 

4.01 

99.9 

99.8 

4.01 

4.01 

4.01 

4.01 

4.01 

4.01 

4.01 

4.01 

4.01 

4.01 

4.01 

4.01 

4.01 

4.01 

4.01 

99.8 

99.7 

4.02 

4.02 

4.02 

4.02 

4.02 

4.02 

4.02 

4.02 

4.02 

4.02 

4.02 

4.02 

4.02 

4.02 

4.02 

99.7 

99.6 

4.03 

4.03 

4.03 

4.03 

4.03 

4.03 

4.03 

4.03 

4.03 

4.03 

4.03 

4.03 

4.02 

4.02 

4.02 

99.6 

99.5 

4.04 

4.04 

4.04 

4.04 

4.03 

4.03 

4.03 

4.03 

4.03 

4.03 

4.03 

4.03 

4.03 

4.03 

4.03 

99.5 

99.4 

4.04 

4.04 

4.04 

4  04 

4.04 

4.04 

4.04 

4.04 

4.04 

4.04 

4.04 

4.04 

4.04 

4.04 

4.04 

99.4 

99.3 

4.05 

4.05 

4.05 

4.05 

4.05 

4.05 

4.05 

4.05 

4.04 

4.04 

4.04 

4.04 

4.04 

4.04 

4.04 

99.3 

99.2 

4.06 

4.06 

4.06 

4.06 

4.05 

4.05 

4.05 

4.05 

4.05 

4.05 

4.05 

4.05 

4.05 

4.05 

4.05 

99.2 

99.1 

4.06 

4.06 

4.06 

4.06 

4.06 

4.06 

4.06 

4.06 

4.06 

4.06 

4.06 

4.06 

4.06 

4.06 

4.06 

99.1 

89  0 

4.07 

4.07 

4.07 

4.07 

4.07 

4.07 

4.07 

4.07 

4.06 

4.06 

4.06 

4.06 

4.06 

4.06 

4.06 

99  0 

98.9 

4.08 

4.08 

4.08 

4.08 

4.07 

4.07 

4.07 

4.07 

4.07 

4.07 

4.07 

4.07 

4.07 

4.07 

4.07 

98.9 

98.8 

4.09 

4.09 

4.08 

4.08 

4.08 

4.08 

4.08 

4.08 

4.08 

4.08 

4.08 

4.08 

4.07 

4.07 

4.07 

98.8 

98.7 

4.09 

4.09 

4.09 

4.09 

4.09 

4.09 

4.09 

4.09 

4.08 

4.08 

4.08 

4.08 

4.08 

4.08 

4.08 

98.7 

98.6 

4.10 

4.10 

4.10 

4.10 

4.10 

4.09 

4.09 

4.09 

4.09 

4.09 

4.09 

4.09 

4.09 

4.09 

4.09 

98.6 

98.5 

4.11 

4.11 

4.11 

4.10 

4.10 

4.10 

4.10 

4.10 

4.10 

4.10 

4.10 

4.10 

4.09 

4.09 

4.09 

98.5 

98.4 

4.12 

4.11 

4.11 

4.11 

4.11 

4.11 

4.11 

4.10 

4.10 

4.10 

4.10 

4.10 

4.10 

4.10 

4.10 

98.4 

98.3 

4.12 

4.12 

4.12 

4.12 

4.12 

4.11 

4.11 

4.11 

4.11 

4.1i 

4.11 

4.11 

4.11 

4.11 

4.10 

98.3 

98.2 

4.13 

4.13 

4.13 

4.12 

4.12 

4.12 

4.12 

4.12 

4.12 

4.12 

4.12 

4.11 

4.11 

4.11 

4.11 

98.2 

98.1 

4.14 

4.14 

4.13 

4.13 

4.13 

4.13 

4.13 

4.12 

4.12 

4.12 

4.12 

4.12 

4.12 

4.12 

4.12 

98.1 

98.0 

4.14 

4.14 

4.14 

4.14 

4.14 

4.13 

4.13 

4.13 

4.13 

4.13 

4.13 

4.13 

4.13 

4.12 

4.12 

98.0 

97.9 

4.15 

4.15 

4.15 

4.15 

4.14 

4.14 

4.14 

4.14 

4.13 

4.13 

4.13 

4.13 

4.13 

4.13 

4.13 

97.9 

97. S 

4.16 

4.16 

4.15 

4.15 

4.15 

4.15 

4.15 

4.14 

4.14 

4.14 

4.14 

4.14 

4.14 

4.14 

4.13 

97.8 

97.7 

4.17 

4.16 

4.16 

4.16 

4.16 

4.15 

4.15 

4.15 

4.15 

4.15 

4.15 

4.14 

4.14 

4.14 

4.14 

97.7 

97.6 

4.17 

4.17 

4.17 

4.17 

4.16 

4.16 

4.16 

4.16 

4.15 

4.15 

4.15 

4.15 

4.15 

4.15 

4.15 

97.6 

97.5 

4.  IS 

4.18 

4.18 

4.17 

4.17 

4.17 

4.17 

4.16 

4.16 

4.16 

4.16 

4.16 

4.16 

4.16 

4.15 

97.5 

97.4 

4.19 

4.18 

4.18 

4.18 

4.18 

4.17 

4.17 

4.17 

4.17 

4.17 

4.17 

4.16 

4.16 

4.16 

4.16 

97.4 

97.3 

4.19 

4.19 

4.19 

4.19 

4.18 

4.18 

4.18 

4.18 

4.17 

4.17 

4.17 

4.17 

4.17 

4.17 

4.17 

97.3 

97.2 

4.20 

4.20 

4.20 

4.19 

4.19 

4.19 

4.18 

4.18 

4.18 

4.18 

4.18 

4.18 

4.17 

4.17 

4.17 

97.2 

97.1 

4.21 

4.21 

4.20 

4.20 

4.20 

4.19 

4.19 

4.19 

4.19 

4.19 

4.18 

4.18 

4.18 

4.18 

4.18 

97.1 

97.0 

4.22 

4.21 

4.21 

4.21 

4.20 

4.20 

4.20 

4.20 

4.19 

4.19 

4.19 

4.19 

4.19 

4.19 

4.18 

97.0 

96.9 

4.22 

4.22 

4.22 

4.22 

4.21 

4.21 

4.20 

4.20 

4.20 

4.20 

4.20 

4.19 

4.19 

4.19 

4.19 

96.9 

96.8 

4.23 

4^23 

4.22 

4.22 

4.22 

4.21 

4.21 

4.21 

4.21 

4.21 

4.20 

4.20 

4.20 

4.20 

4.20 

96.8 

96.7 

4.24 

4.23 

4.23 

4.23 

4.23 

4.22 

4.22 

4.22 

4.21 

4.21 

4.21 

4.21 

4.21 

4.20 

4.20 

96.7 

96.6 

4.25 

4.24 

4.24 

4.24 

4.23 

4.23 

4.23 

4.22 

4.22 

4.22 

4.22 

4.21 

4.21 

4.21 

4.21 

96.6 

96.5 

4.25 

4.25 

4.25 

4.24 

4.24 

4.24 

4.23 

4.23 

4.23 

4.23 

4.22 

4.22 

4.22 

4.22 

4.22 

96.5 

96.4 
96.3 

4.26 
4.27 

4.26 
4.26 

4.25 
4.26 

4.25 
4.26 

4.25 
4.25 

4.24 
4.25 

4.24 
4.25 

4.24 

4.23 

4.23 
4.24 

4.23 
4.23 

4.23 
4.23 

4.22 
4.23 

4.22 
4.23 

4.22 
4.23 

96.4 
96.3 

4.24 

4.24 

96.2 

4.28 

4.27 

4.27 

4.264.26 

4.20 

4.25 

4.25 

4.25 

4.24 

4.24 

4.24 

4.24 

4.24 

4.23 

96.2 

96.1 

4.28 

4.28 

4.27 

4.27 

4.27 

4.26 

4.26 

4.26 

4.26 

4.25 

4.25 

4.25 

4.24 

4.24 

4.24 

96.1 

96.0 

4.29 

4.29 

4.2S 

4.28 

4.27 

4.27 

4.27 

4.26 

4.26 

4.26 

4.26 

4.25 

4.25 

4.25 

4.25 

96.0 

95.9 

4.30 

4.29 

4.29 

4.29 

4.28 

4.2S 

4.27 

4.27 

4.27 

4.26 

4.26 

4.26 

4.26 

4.25 

4.25 

95.9 

95.8 

4.31 

4.30 

4.30 

4.29 

4.29 

4.28 

4.28 

4.28 

4.2S 

4.27 

4.27 

4.26 

4.26 

4.26 

4.26 

95.8 

95.7 

4.31 

4.31 

4.30 

4.30 

4.30 

4.29 

4.29 

4.28 

4.2S 

4.28 

4.27 

4.27 

4.27 

4.27 

4.26 

95.7 

95.6 

4.32 

4.32 

4.31 

4.31 

4.30 

4.30 

4.29 

4.29 

4.29 

4.28 

4.28 

4.28 

4.28 

4.27 

4.27 

95.6 

95.5 

4.33 

4.32 

4.32 

4.32 

4.31 

4.31 

4.30 

4.30 

4.30 

4.29 

4.29 

4.28 

4.28 

4.28 

4.28 

95.5 

95.4 

4.34 

4.33 

4.33 

4.32 

4.32 

4.31 

4.31 

4.30 

4.30 

4.30 

4.29 

4.29 

4.29 

4.29 

4.28 

95.4 

95.3 

4.34 

4.34 

4.33 

4.33 

4.32 

4.32 

4.32 

4.31 

4.31 

4.30 

4.30 

4.30 

4.29 

4.29 

4.29 

95.3 

95.2 

4.35 

4.35 

4.34 

4.34 

4.33 

4.33 

4.32 

4.32 

4.31 

4.31 

4.31 

4.30 

4.30 

4.30 

4.30 

95.2 

95.1 

4.36 

4.35 

4.35 

4.34 

4.34 

4.33 

4.33 

4.33 

4.32 

4.32 

4.31 

4.31 

4.31 

4.31 

4.30 

95.1 

95  0 

4.37 

4.36 

4.36 

4.35 

4.35 

4.34 

4.34 

4.33 

4.33 

4.32 

4.32 

4.32 

4.31 

4.31 

4.30 

95  0 

113 


4  %    Bond — Interest  payable  semi-annually 

RATES  OF  INTEREST  REALIZED 

if  purchased  at  prices  indicated  and  held  to  maturity 

Price 

YEARS  TO  RUN 

Price 

6 

6^ 

7 

7H 

8 

8H 

0 

9H 

10 

10  X 

11 

11H 

12 

123^ 

13 

95.0 

4.97 

4.91 

4.85 

4.80 

4.76 

4.72 

4.69 

4.66 

4.63 

4.61 

4.58 

4.56 

4.55 

4.53 

4.51 

95.0 

94.9 

4.99 

4.93 

4.87 

4.82 

4.77 

4.74 

4.70 

4.67 

4.64 

4.62 

4.60 

4.58 

4.56 

4.54 

4.52 

04.9 

94.8 

5.01 

4.94 

4.89 

4.84 

4.79 

4.75 

4.72 

4.69 

4  66 

4.63 

4.61 

4.59 

4.57 

4.55 

4.53 

94.8 

94.7 

5.03 

4.96 

4.90 

4.85 

4.81 

4.77 

4.73 

4.70 

4.67 

4.64 

4.62 

4.60 

4.58 

4.56 

4.54 

04.7 

94.6 

5.05 

4.98 

4.92 

4.87 

4.82 

4.78 

4.75 

4.71 

4.68 

4.66 

4.63 

4.61 

4.59 

4.57 

4.55 

94.6 

94.5 

5.08 

5.00 

4.94 

4.89 

4.84 

4.80 

4.76 

4.73 

4.70 

4.67 

4.64 

4.62 

4.60 

4.58 

4.57 

94.5 

94.4 

5.10 

5.02 

4.96 

4.90 

4.85 

4.81 

4.77 

4.74 

4.71 

4.68 

4.66 

4.63 

4.61 

4.59 

4.68 

94.4 

94.3 

5.12 

5.04 

4.98 

4.92 

4.87 

4.83 

4.79 

4.75 

4.72 

4.69 

4.67 

4.65 

4.62 

4.61 

4.59 

94.3 

94.2 

5.14 

5.06 

4.99 

4.93 

4.88 

4.84 

4.80 

4.77 

4.73 

4.71 

4.68 

4.66 

4.64 

4.62 

4.80 

94.2 

94.1 

5.16 

5.08 

5.01 

4.95 

4.90 

4.86 

4.82 

4.78 

4.75 

4.72 

4.69 

4.67 

4.65 

4.63 

4.61 

94.1 

94.0 

5.18 

5.10 

5.03 

4.97 

4.92 

4.87 

4.83 

4.79 

4.76 

4.73 

4.70 

4.68 

4.66 

4.64 

4   62 

91.0 

93.9 

5.20 

5.12 

5.05 

4.98 

4.93 

4.89 

4.85 

4.81 

4.77 

4.74 

4.72 

4.69 

4.67 

4.65 

4.63 

03.9 

93.8 

5.22 

5.13 

5.06 

5  00 

4.95 

4.90 

4.86 

4.82 

4.79 

4.76 

4.73 

4.70 

4.68 

4.66 

4.64 

93.8 

93.7 

5.24 

5.15 

5.08 

5.02 

4.96 

4.92 

4.87 

4.83 

4.80 

4.77 

4.74 

4.72 

4.69 

4.67 

4.65 

93.7 

93.6 

5.26 

5.17 

5.10 

5.04 

4.98 

4.93 

4.89 

4.85 

4.81 

4.78 

4.75 

4.73 

4.70 

4.68 

4.66 

93.6 

93.5 

5.19 

5.12 

5.05 

5.00 

4.95 

4.90 

4.86 

4.83 

4.80 

4.77 

4.74 

4.72 

4.69 

4.67 

93.5 

93.4 

5.21 

5.13 

5.07 

5.01 

4.96 

4.92 

4.88 

4.84 

4.81 

4.78 

4.75 

4.73 

4.71 

4.68 

93.4 

93.3 

5.23 

5.15 

5.09 

5.03 

4.98 

4.93 

4.89 

4.85 

4.82 

4.79 

4.76 

4.74 

4.72 

4.69 

93.3 

93.2 

5.25 

5.17 

5.10 

5.04 

4.99 

4.95 

4.90 

4.87 

4.83 

4.80 

4.78 

4.75 

4.73 

4.70 

93.2 

93.1 

5.19 

5.12 

5.06 

5.01 

4.96 

4.92 

4.88 

4.85 

4.82 

4.79 

4.76 

4.74 

4.72 

93.1 

93  0 

5.21 

5.14 

5.08 

5.02 

4.07 

4.93 

4.89 

4.86 

4.83 

4.80 

4.77 

4.75 

4.73 

93.0 

92.9 

5.22 

5.15 

5.09 

5.04 

4.99 

4.94 

4.91 

4.87 

4.84 

4  81 

4.79 

4.76 

4.74 

92.0 

92  8 

5.24 

5.17 

5.11 

5.05 

5.00 

4.96 

4.92 

4.89 

4.85 

4.82 

4.80 

4.77 

4.75 

92.8 

92.7 

5.26 

5.19 

5.12 

5.07 

5.02 

4.97 

4.93 

4.90 

4.87 

4.84 

4.81 

4.78 

4.76 

92  7 

92.6 

5.20 

5.14 

5.08 

5.03 

4.99 

4.95 

4  91 

4.88 

4.85 

4.82 

4.79 

4.77 

92.6 

92.5 

5.22 

5.16 

5.10 

5.05 

5.00 

4.96 

4.92 

4.89 

4.86 

4.83 

4.81 

4.78 

92.5 

92.4 

5.24 

5.17 

5.11 

5.06 

5.02 

4.97 

4.94 

4.90 

4.87 

4.84 

4.82 

4.79 

92.4 

92.3 

5.26 

5.19 

5.13 

5.08 

5.03 

4.99 

4.95 

4.91 

4.88 

4.85 

4.83 

4.80 

92.3 

92  2 

5.21 

5.14 

5.09 

5.04 

5.00 

4.96 

4.93 

4.90 

4.87 

4.84 

4.82 

92.2 

92.1 

5.22 

5.16 

5.11 

5.06 

5.01 

4.98 

4.94 

4.91 

4.88 

4.85 

4.8S 

92.1 

93  0 

5.24 

5.17 

5.12 

5.07 

5.03 

4.99 

4.95 

4.92 

4.89 

4.86 

4.84 

92.0 

5.25 

5.19 

5.14 

5.09 

5.04 

5.00 

4.96 

4.03 

4.00 

4.87 

4.85 

01.0 

5.20 

5.15 

5.10 

5.06 

5.01 

4.98 

4.94 

4.91 

4.88 

4.86 

01.8 

5.22 

5.17 

5.11 

5.07 

5.03 

4  99 

4.90 

4.92 

4.90 

4.87 

01.7 

5.24 

5.18 

5.13 

5.08 

5.04 

5.00 

4.07 

4.04 

4.01 

4.88 

01.6 

5.25 

5.20 

5.14 

5.10 

5.05 

5.02 

4.08 

4  95 

4.92 

4.89 

01.5 

5.21 

5.16 

5.11 

5.07 

5.03 

4.00 

4.96 

4.93 

4.90 

01.4 

5.23 

5.17 

5.12 

5.08 

5.04 

5.00 

4.97 

4.91 

4.91 

01.3 

5.24 

5.19 

5.14 

5.09 

5.05 

5.02 

4.98 

4.95 

4.92 

91.2 

5.26 

5.20 

5.15 

5.11 

5.07 

5.03 

4.99 

4.06 

4.94 

91.1 

5.21 

5.16 

5.12 

5.08 

5.04 

5.01 

4.97 

4.95 

91.0 

Rates  of  Interest 

5.23 
5.24 

5.18 
5.10 

5.13 
5.15 

5.09 
5.10 

5.05 
5  06 

5.02 
5.03 

4  99 
5.00 

4.96 
4.97 

90.9 
90  8 

realized  above  5.25% 

5.26 

5.21 
5.22 

5.16 
5.17 

5.12 
5.13 

5. OS 
5.09 

5.04 
5.05 

5  01 
5.02 

4.98 
4.09 

90.7 
90.6 

not  figured 

5.23 
5.25 

5.19 
5.20 

5.14 
5.15 

5.10 
5.11 

5.07 
5.08 

5.03 
5.04 

5.00 
5.01 

90.5 
90.4 

i 

5.21 

5.17 

5.13 

5.09 

5. 06 

5.03 

90.3 

5.23 

5.18 

S .  14 

5.10 

5.07 

5.04 

90.2 

5.24 

5.19 

5.15 

5.11 

5.08 

6.05 

90.1 

5.25 

5.21 

5.16 

5.13 

5.09 

5.06 

90.0 

114 


4  %    Bond — Interest  payable  semi-annually 

RATES  OF  INTEREST  REALIZED 

if  purchased  at  prices  indicated  and  held  to  maturity 


Price 

YEARS  TO  RUN 

Price 

21 

4.37 

21H 

4.36 

22 

22Y2 

23 
4.35 

23H 
4.34 

24 
4.34 

24H 

25 

25^ 

26 

26H 
4.32 

27 
4.31 

2734 

28 
4.31 

95  0 

4.36 

4.35 

4.33 

4.33 

4.32 

4.32 

4.31 

95.0 

94.9 

4.37 

4.37 

4.36 

4.36 

4.35 

4.35 

4.34 

4.34 

4.34 

4.33 

4.33 

4.32 

4.32 

4.32 

4.31 

94.9 

94.8 

4.38 

4.37 

4.37 

4.37 

4.36 

4.35 

4.35 

4.35 

4.34 

4.34 

4.33 

4.33 

4.33 

4.32 

4.32 

94.8 

94.7 

4.39 

4.38 

4.38 

4.37 

4.37 

4.36 

4.36 

4.35 

4.35 

4.34 

4.34 

4.34 

4.33 

4.33 

4.33 

94.7 

94.6 

4.40 

4.39 

4.38 

4.38 

4.37 

4.37 

4.36 

4.36 

4.36 

4.35 

4.35 

4.34 

4.34 

4.34 

4.33 

94.6 

94.5 

4.40 

4.40 

4.39 

4.39 

4.38 

4.38 

4.37 

4.37 

4.36 

4.36 

4.35 

4.35 

4.35 

4.34 

4.34 

94.5 

94.4 

4.41 

4.40 

4.40 

4.39 

4.39 

4.38 

4.38 

4.37 

4.37 

4.36 

4  36 

4.36 

4.35 

4.35 

4.35 

94.4 

94.3 

4.42 

4.41 

4.41 

4.40 

4.40 

4.39 

4.39 

4.38 

4.38 

4.37 

4.37 

4.36 

4.36 

4.36 

4.35 

94.3 

94.2 

4.43 

4.42 

4.41 

4.41 

4.40 

4.40 

4.39 

4.39 

4.38 

4.38 

4.37 

4.37 

4.37 

4.36 

4.36 

94.2 

94.1 

4.43 

4.43 

4.42 

4.42 

4.41 

4.40 

4.40 

4.40 

4.39 

4.39 

4.3S 

4.38 

4.37 

4.37 

4.37 

94.1 

94.0 

4.44 

4.43 

4.43 

4.42 

4.42 

4.41 

4.41 

4.40 

4.40 

4.39 

4.39 

4.38 

4.38 

4.38 

4.37 

91.0 

93.9 

4.45 

4.44 

4.44 

4.43 

4.42 

4.42 

4.41 

4.41 

4.41 

4.40 

4.39 

4.39 

4.39 

4.38 

4.38 

93.9 

93.8 

4.46 

4.45 

4.44 

4.44 

4.43 

4.43 

4.42 

4.42 

4.41 

4.41 

4.40 

4.40 

4.39 

4.39 

4.39 

93.8 

93.7 

4.46 

4.46 

4.45 

4.44 

4.44 

4.43 

4.43 

4.42 

4.42 

4.41 

4.41 

4.40 

4.40 

4.40 

4.39 

93.7 

93.6 

4.47 

4.47 

4.46 

4.45 

4.45 

4.44 

4.44 

4.43 

4.43 

4.42 

4.42 

4.41 

4.41 

4.40 

4.40 

93.6 

93.5 

4.48 

4.47 

4.47 

4.46 

4.45 

4.45 

4.44 

4.44 

4.43 

4.43 

4.42 

4.42 

4.41 

4.41 

4.41 

93.5 

93.4 

4.49 

4.48 

4.47 

4.47 

4.46 

4.46 

4.45 

4.45 

4.44 

4.43 

4.43 

4.42 

4.42 

4.42 

4.41 

93.4 

93.3 

4.50 

4.49 

4.48 

4.48 

4.47 

4.46 

4.46 

4.45 

4.45 

4.44 

4.44 

4.43 

4.43 

4.42 

4.42 

93.3 

93.2 

4.50 

4.50 

4.49 

4.48 

4.48 

4.47 

4.47 

4.46 

4.45 

4.45 

4.44 

4.44 

4.43 

4.43 

4.43 

93.2 

93.1 

4.51 

4.50 

4.50 

4.49 

4.48 

4.48 

4.47 

4.47 

4.46 

4.46 

4.45 

4.45 

4.44 

4.44 

4.43 

93.1 

93  0 

4.52 

4.51 

4.50 

4.50 

4.49 

4.49 

4.48 

4.47 

4.47 

4.46 

4.46 

4.45 

4.45 

4.44 

4.44 

93.0 

92.9 

4.53 

4.52 

4.51 

4.51 

4.50 

4.49 

4.49 

4.48 

4.48 

4.47 

4.46 

4.46 

4.45 

4.45 

4.45 

92.9 

92.8 

4.54 

4.53 

4.52 

4.51 

4.51 

4.50 

4.49 

4.49 

4.48 

4.48 

4.47 

4.47 

4.46 

4.46 

4.45 

92.8 

92.7 

4.54 

4.54 

4.53 

4.52 

4.51 

4.51 

4.50 

4.50 

4.49 

4.48 

4.48 

4.47 

4.47 

4.46 

4.46 

92.7 

92.6 

4.55 

4.54 

4.54 

4.53 

4.52 

4.51 

4.51 

4.50 

4.50 

4.49 

4.48 

4.48 

4.47 

4.47 

4.47 

92.6 

92.5 

4.56 

4.55 

4.54 

4.54 

4.53 

4.52 

4.52 

4.51 

4.50 

4.50 

4.49 

4.49 

4.48 

4.48 

4.47 

92.5 

92.4 

4.57 

4.56 

4.55 

4.54 

4.54 

4.53 

4.52 

4.52 

4.51 

4.50 

4.50 

4.49 

4.49 

4.48 

4.48 

92.4 

92.3 

4.58 

4.57 

4.56 

4.55 

4.54 

4.54 

4.53 

4.52 

4.52 

4.51 

4.51 

4.50 

4.49 

4.49 

4.48 

92.3 

92.2 

4.58 

4.58 

4.57 

4.56 

4.55 

4.54 

4.54 

4.53 

4.52 

4.52 

4.51 

4.51 

4.50 

4.50 

4.49 

92.2 

92.1 

4.59 

4.58 

4.58 

4.56 

4.56 

4.55 

4.54 

4.54 

4.53 

4.53 

4.52 

4.51 

4.51 

4.50 

4.50 

92.1 

93.0 

4.60 

4.59 

4.58 

4.57 

4.56 

4.56 

4.55 

4.64 

4.54 

4.53 

4.53 

4.52 

4.51 

4.51 

4.50 

92.0 

91.9 

4.61 

4.60 

4.59 

4.58 

4.57 

4.56 

4.56 

4.55 

4.55 

4.54 

4.53 

4.53 

4.52 

4.52 

4.51 

91.9 

91.8 

4.62 

4.61 

4.60 

4.59 

4.58 

4.57 

4.57 

4.56 

4.55 

4.55 

4.54 

4.53 

4.53 

4.52 

4.52 

91.8 

91.7 

4.62 

4.61 

4.61 

4.60 

4.59 

4.58 

4.57 

4.57 

4.56 

4.55 

4.55 

4.54 

4.54 

4.53 

4.52 

91.7 

91.6 

4.63 

4.62 

4.61 

4.60 

4.60 

4.59 

4.58 

4.57 

4.57 

4.56 

4.55 

4.55 

4.54 

4.54 

4.53 

91.6 

91.5 

4.64 

4.63 

4.62 

4.61 

4.60 

4.60 

4.59 

4.58 

4.57 

4.57 

4.56 

4.56 

4.55 

4.54 

4.54 

91.5 

91.4 

4.65 

4.64 

4.63 

4.62 

4.61 

4.60 

4.60 

4.59 

4.58 

4.57 

4.57 

4.56 

4.56 

4.55 

4.54 

91.4 

91.3 

4.65 

4.65 

4.64 

4.63 

4.62 

4.61 

4.60 

4.60 

4.59 

4.58 

4.58 

4.57 

4.56 

4.56 

4.55 

91.3 

91.2 

4.66 

4.65 

4.64 

4.63 

4.63 

4.62 

4.61 

4.60 

4.60 

4.59 

4.58 

4.58 

4.57 

4.56 

4.56 

91.2 

91.1 

4.67 

4.66 

4.65 

4.64 

4.63 

4.63 

4.62 

4.61 

4.60 

4.60 

4.59 

4.58 

4.58 

4.57 

4.57 

91.1 

91.0 

4.68 

4.67 

4.66 

4.65 

4.64 

4.63 

4.63 

4.62 

4.61 

4.60 

4.60 

4.59 

4.58 

4.5S 

4.57 

91.8 

90.9 

4.69 

4.68 

4.67 

4.66 

4.65 

4.64 

4.63 

4.63 

4.62 

4.61 

4.60 

4.60 

4.59 

4.59 

4.58 

90.9 

90.8 

4.69 

4.68 

4.67 

4.67 

4.66 

4.65 

4.64 

4.63 

4.62 

4.62 

4.61 

4.60 

4.60 

4.59 

4.59 

90.8 

90.7 

4.70 

4.69 

4.68 

4.67 

4.66 

4.66 

4.65 

4.64 

4.63 

4.62 

4.62 

4.61 

4.61 

4.60 

4.59 

90.7 

90.6 

4.71 

4.70 

4.69 

4.68 

4.67 

4.66 

4.66 

4.65 

4.64 

4.63 

4.62 

4.62 

4.61 

4.61 

4.60 

90.6 

90.5 

4.72 

4.71 

4.70 

4.69 

4.68 

4.67 

4.66 

4.66 

4.65 

4.64 

4.63 

4.63 

4.62 

4.61 

4.61 

90.5 

90.4 

4.73 

4.71 

4.70 

4.70 

4.69 

4.68 

4.67 

4.66 

4.65 

4.65 

4.64 

4.63 

4.63 

4.62 

4.61 

90.4 

90.3 

4.73 

4.72 

4.71 

4.70 

4.69 

4.69 

4.68 

4.67 

4.66 

4.65 

4.65 

4.64 

4.63 

4.63 

4.62 

90.3 

90.2 

4.74 

4.73 

4.72 

4.71 

4.70 

4.69 

4.69 

4.6814.67 

4.66 

4.65 

4.65 

4.64 

4.63 

4.63 

90.2 

90.1 

4.75 

4.74 

4.73 

4.72 

4.71 

4.70 

4.69 

4.68 

4.68 

4.67 

4.66 

4.65 

4.65 

4.64 

4.64 

90.1 

90.0 

4.76 

4.75 

4.74 

4.73 

4.72 

4.71 

4.70 

4.69 

4.68 

4.68 

4.67 

4.66 

4.65 

4.65 

4.64 

90.0 

115 


4^4  %     Bond — Interest  payable  semi-annually 

RATES  OF  INTEREST  REALIZED 
if  purchased  at  prices  indicated  and  held  to  maturity 


YEARS  TO  RUN 

Price 

8 

sy2 

9 

9H 

10 

10H 

11 

HH 

12 

12H 

13 

13H 

14 

liH 

15 

100  0 

4.25 

4.25 

4.25 

4.25 

4.25 

4.25 

4.25 

4.25 

4.25 

4.25 

4 .  25 

4.25 

4.25 

4.25 

4.25 

99.9 

4.27 

4.26 

4.26 

4.26 

4.26 

4.26 

4.26 

4.26 

4.26 

4.26 

4.26 

4.26 

4.26 

4.26 

4.26 

99. S 

4.28 

4.28 

4.28 

4.28 

4.27 

4.27 

4.27 

4.27 

4.27 

4.27 

4.27 

4.27 

4.27 

4.27 

4.27 

99.7 

4.30 

4.29 

4.29 

4.29 

4.29 

4.29 

4.28 

4.28 

4.28 

4.28 

4.28 

4.28 

4.28 

4.28 

4.28 

99.6 

4.31 

4.31 

4.30 

4.30 

4.30 

4.30 

4.30 

4.29 

4.29 

4.29 

4.29 

4.29 

4.29 

4.29 

4.29 

99.5 

4.33 

4.32 

4.32 

4.32 

4.31 

4.31 

4.31 

4.31 

4.30 

4.30 

4  30 

4.30 

4.30 

4.30 

4.30 

99.4 

4.34 

4.34 

4.33 

4.33 

4.32 

4.32 

4.32 

4.32 

4.31 

4.31 

4.31 

4.31 

4.31 

4.31 

4.31 

99.3 

4.36 

4.35 

4.35 

4.34 

4.34 

4.33 

4.33 

4.33 

4.33 

4.32 

4.32 

4.32 

4.32 

4.32 

4.31 

99.2 

4.37 

4.36 

4. 30 

4.35 

4.35 

4.35 

4.34 

4.34 

4.34 

4.33 

4.33 

4.33 

4.33 

4.33 

4.32 

99.1 

4.39 

4.38 

4.37 

4.37 

4.36 

4.36 

4.35 

4.35 

4.35 

4.34 

4.34 

4.34 

4.34 

4.33 

4.33 

99  0 

4.40 

4.39 

4.39 

4.38 

4.37 

4.37 

4.37 

4.36 

4.36 

4.35 

4.35 

4.35 

4.35 

4.34 

4.34 

98.9 

4.42 

4.41 

4.40 

4.39 

4.39 

4.38 

4.38 

4.37 

4.37 

4.36 

4.36 

4.36 

4.36 

4.35 

4.35 

98.8 

4.43 

4.42 

4.41 

4.41 

4.40 

4.39 

4.39 

4.38 

4.38 

4.38 

4.37 

4.37 

4.37 

4.36 

4.36 

98.7 

4.45 

4.44 

4.43 

4.42 

4.41 

4.41 

4.40 

4.40 

4.39 

4.39 

4.38 

4.38 

4.37 

4.37 

4.37 

98.6 

4.46 

4.45 

4.44 

4.43 

4.42 

4.42 

4.41 

4.41 

4.40 

4.40 

4.39 

4  39 

4.38 

4.38 

4.38 

98.5 

4.48 

4.46 

4.46 

4.45 

4.44 

4.43 

4.42 

4.42 

4.41 

4.41 

4.40 

4.40 

4.39 

4.39 

4.39 

98.4 

4.49 

4.48 

4.47 

4.46 

4.45 

4.44 

4.44 

4.43 

4.42 

4.42 

4.41 

4.41 

4.40 

4.40 

4.40 

9S.3 

4.51 

4.49 

4.48 

4.47 

4.46 

4.45 

4.45 

4.44 

4.43 

4.43 

4.42 

4.42 

4.41 

4.41 

4.41 

98.2 

4.52 

4.51 

4.50 

4.49 

4.47 

4.47 

4.46 

4.45 

4.44 

4.44 

4.43 

4.43 

4.42 

4.42 

4.42 

98.1 

4.54 

4.52 

4.51 

4.50 

4.49 

4.48 

4.47 

4.46 

4.46 

4.45 

4.44 

4.44 

4.43 

4.43 

4.42 

98  0 

4.55 

4.54 

4.52 

4.51 

4.50 

4.49 

4.48 

4.47 

4.47 

4.46 

4.45 

4.45 

4.44 

4.44 

4.43 

97.9 

4.57 

4.55 

4.54 

4.53 

4.51 

4.50 

4.49 

4.49 

4.48 

4  47 

4.46 

4  46 

4.45 

4.45 

4.44 

97.8 

4.58 

4.57 

4.55 

4.54 

4.53 

4.51 

4.51 

4.50 

4.49 

4.48 

4.47 

4.47 

4.46 

4.46 

4.45 

97.7 

4.60 

4.58 

4.67 

4.55 

4.54 

4.53 

4.52 

4.51 

4.50 

4.49 

4.49 

4.48 

4.47 

4.47 

4.46 

97.6 

4.61 

4.59 

4.58 

4.56 

4.55 

4.54 

4.53 

4.52 

4.51 

4.50 

4.50 

4.49 

4.48 

4.48 

4.47 

97.5 

4.63 

4.61 

4.59 

4.58 

4.56 

4.55 

4.54 

4.53 

4.52 

4.51 

4.51 

4.50 

4.49 

4.49 

4.4S 

97.4 

4.64 

4.62 

4.61 

4.59 

4.58 

4.56 

4.55 

4.54 

4.53 

4.52 

4.52 

4.51 

4.50 

4.50 

4.49 

97.3 

4.66 

4.64 

4.62 

4.60 

4.59 

4.58 

4.56 

4.55 

4.54 

4.54 

4.53 

4.52 

4.51 

4.51 

4.50 

97.2 

4.67 

4.65 

4.63 

4.62 

4.60 

4.59 

4.57 

4.56 

4.55 

4.55 

4.54 

4.53 

4.52 

4.51 

4.61 

97.1 

4.69 

4.67 

4.65 

4.63 

4.62 

4.60 

4.59 

4.57 

4.57 

4.56 

4.55 

4.54 

4.53 

4.52 

4.52 

97.0 

4.70 

4.68 

4.66 

4.64 

4.63 

4.61 

4.60 

4.59 

4.58 

4.57 

4.56 

4.55 

4.54 

4.53 

4.53 

96.9 

4.72 

4.70 

1  68 

4.66 

4.64 

4.62 

4.61 

4.60 

4.59 

4.58 

4.57 

4.56 

4.55 

4.54 

4.54 

96.8 

4.74 

4.71 

4.69 

4.67 

4.65 

4.64 

4.62 

4.61 

4.60 

4.59 

4.58 

4.57 

4.56 

4.55 

4.55 

96.7 

4.75 

4.73 

4.70 

4.68 

4.67 

4.65 

4.63 

4.62 

4.61 

4.60 

4.59 

4.58 

4.57 

4.56 

4.56 

96.6 

4.77 

4.74 

4.72 

4.70 

4.68 

4.66 

4.65 

4.63 

4.62 

4.61 

4.60 

4.59 

4.58 

4.57 

4.57 

96.5 

4.78 

4.76 

4.73 

4.71 

4.69 

4.68 

4.66 

4.65 

4.63 

4.62 

4.61 

4.60 

4.59 

4.58 

4.58 

96.4 

4.80 

4.77 

4.75 

4.72 

4.71 

4.69 

4.67 

4  66 

4.64 

4.63 

4.62 

4.61 

4.60 

4.59 

4.59 

96.3 

4.81 

4.79 

4.76 

4.74 

4.72 

4.70 

4.68 

4.67 

4.66 

4.64 

4.63 

4.62 

4.61 

4.60 

4.60 

96.2 

4.83 

4.80 

4.77 

4.75 

4.73 

4.71 

4.70 

4  68 

4.67 

4.65 

4.64 

4.63 

4.62 

4  61 

4.60 

96.1 

4.84 

4.82 

4.79 

4.76 

4.75 

4.73 

4.71 

4.69 

4.68 

4.67 

4.65 

4.64 

4.63 

4.62 

4.61 

96  e 

4.86 

4.83 

4.80 

4.78 

4.76 

4.74 

4.72 

4.70 

4.69 

4.6S 

4.66 

4.65 

4.64 

4.63 

4.62 

96.9 

4.88 

4.84 

4.82 

4.79 

4.77 

4.75 

4.73 

4.72 

4.70 

4.69 

4.67 

4.66 

4.65 

4.64 

4.63 

95  8 

4  89 

4.86 

4.83 

4.81 

4.78 

4.76 

4.74 

4.73 

4.71 

4.70 

4.69 

4.67 

4.66 

4.65 

4.64 

95  7 

4  91 

4  87 

4.84 

4.82 

4.80 

4.78 

4.76 

4.74 

4  72 

4  71 

4.70 

4.68 

4.67 

4.66 

4.65 

95.0 

4  92 

4.89 

4.86 

4.83 

4.81 

4.79 

4.77 

4.75 

4.74 

4.72 

4.71 

4.69 

4.68 

4.67 

4.66 

95.5 

4  94 

4.90 

4  87 

4.85 

4.82 

4.80 

4.78 

4.76 

4.75 

4.73 

4.72 

4.70 

4.69 

4.68 

4.67 

95.4 

4.95 

4.92 

4.89 

4.86 

4.84 

4.81 

4.79 

4.77 

4.76 

4.74 

4.73 

4.71 

4.70 

4.69 

4.68 

95.3 

4  97 

4  93 

4  90 

4.87 

4.85 

4.83 

4.81 

4.79 

4.77 

4.75 

4.74 

4.72 

4.71 

4.70 

4.69 

95.2 

4.98 

4.95 

4.92 

4.89 

4.86 

4.84 

4.82 

4.80 

4.78 

4.76 

4.75 

4.74 

4.72 

4.71 

4  70 

95.1 

5.00 

4.9G 

4.93 

4.90 

4.88 

4.85 

4.83 

4.81 

4.79 

4.78 

4.76 

4.75 

4.73 

4.72 

4.71 

95.0 

5.02 

4.98 

4.94 

4.91 

4.89 

4.80 

4.84 

4.82 

4.80 

4.79 

4.77 

4.76 

4.74 

4.73 

4.72 

116 


4r/4  %     Bond — Interest  payable  semi-annually 
RATES  OF  INTEREST  REALIZED 

if  purchased  at  prices  Indicated  and  held  to  maturity 


Price 

100  0 

99.9 
99.8 
99.7 
99.6 

99.5 
99.4 
99.3 
99.2 
99.1 

99  0 

98.9 
98.8 
98.7 
98.6 

98.5 
98.4 
98.3 
98.2 
98.1 

98  0 

97.9 
97.8 
97.7 
97.6 

97.5 
97.4 
97.3 
97.2 


YEARS  TO  RUN 


XbYt     16  16H  17  17^  18  18H  19  19H  20  20y2    21  21]^  22  22}^ 


97.1  4.51 


97  0 

96.9 
96.8 
96.7 
96.6 

96.5 
96.4 
96.3 
96.2 
96.1 

96  0 

95.9 
95.8 
95.7 
95.6 

95  5 
95.4 
95.3 
95.2 
95.1 


4.25 
4.26 
4.27 
4.2S 
4.29 

4.30 
4.30 
4.31 
4.32 
4.33 

4.34 
4.35 
4.36 
4.37 
4.38 

4.39 
4.39 
4.40 
4.41 
4.42 

4.43 
4.44 
4.45 
4.46 
4.47 

4.48 
4.49 
4.49 
4.50 


4.52 
4.53 
4.54 
4.55 
4.56 

4.57 
4.58 
4.59 
4.60 
4.61 

4.62 
4.63 
4.63 
4.64 
4.65 

4.66 
4.67 
4.68 
4.69 
4.70 


4.25 
1.26 
4.27 
4.28 
4.29 

4.29 
4.30 
4.31 
4.32 
4.33 

4.34 
4.35 
4.36 
4.36 
4.37 

4.38 
4.39 
4.40 
4.41 
4.42 

4.43 
4.44 
4.44 
4.45 
4.46 

4.47 
4.48 
4.49 
4.50 
4.51 


4.52 
4.53 
4.53 
4.54 
4.55 

4.56 
4.57 
4.58 
4.59 
4.60 

61 

62 

63 

4.64 

4.64 

4.65 
4.66 
4.67 
4.68 
4.69 


4.25 
4.26 
4.27 
4.2S 
4.28 

4.29 
4.30 
4.31 
4.32 
4.33 

4.34 
4.34 
4.35 
4.36 
4.37 

4.38 
4.39 
4.40 
4.40 
4.41 

4.42 
4.43 
4.44 
4.45 
4.46 

4.47 
4.47 
4.48 
4.49 


4.25 
4.26 
4.27 
4.28 
4.28 

4.29 
4.30 
4.31 
4.32 
4.33 


.33 

.34 
4.35 
4.36 
4.37 

4.38 
4.38 
4.39 
4.40 
4.41 


4.25 
4.26 
4.27 
4.27 
4.28 

4.29 
4.30 
4.31 
4.32 
4.32 

4.33 
4.34 
4.35 
4.36 
4.37 

4.37 
4.38 
4.39 
4.40 
4.41 


4.424.42 
4.43  4.42 


4.504.50 


4.51 
4.52 
4.53 
4.54 
4.55 

4.56 

4.56 

4.5 

4.58 

4.59 

4.60 
4.61 
4.62 
4.63 
4.64 

4.64 

4.65 

66 

67 

4.68 


4.44 
4.44 
4.45 

46 
4.47 
4.48 
4.49 


4.50 
4.51 
4.52 
4.53 
4.54 

4.55 
4.56 
4.57 
4.57 
4.58 


59 

60 
4.61 
4.62 
4.63 

4.64 
4  64 
4.65 


4.43 
4.44 
4.45 

4.46 
4.47 
4.47 
4.48 
4.49 

4.50 
4.51 
4.52 
4.53 
4.53 

4.54 
4.55 
4.56 
4.57 
4.58 


4.25 
4.26 
4.27 
4.27 
4.28 

4.29 
4.30 
4.31 
4.31 
4.32 

4.33 
4.34 
4.35 
4.35 
4.36 


58 

59 

4.60 

4.61 

4.62 

4.63 
4.64 
4.65 


4.66  4.65 
4.674.66 


4.41 
4.42 
4.43 

4.44 
4.44 

4.45 
4.46 
4.47 
4.48 
4.49 

4.49 
4.50 
4.51 
4.52 
4.53 

4.54 
4.54 
4.55 
4.56 
4.57 

4.58 
4.59 
4.60 
4.60 
4.61 


4.25 
4.26 
4.27 
4.27 
4.28 

4.29 
4.30 
4.30 
4.31 
4.32 

4.33 
4.34 
4.34 
4.35 
4.36 

4.37 
4.38 
4.38 
4.39 


4.41 
4.42 
4.42 
4.43 
4.44 

4.45 
4.46 
4.47 
4.47 
4.48 

4.49 
4.50 
4.51 
4.51 
4.52 


02 

63 

4.64 

4.65 

4.66 


4.53 
4.54 
4.55 
4.56 
4.56 

4.57 
4.58 
4.59 
4.60 
4.61 


61 

62 

4.63 

4.64 

4.65 


4.25 
4.26 
4.27 
4.27 
4.28 

4.29 
4.30 
4.30 
4.31 
4.32 

4.33 
4.34 
4.34 
4.35 
4.36 

4.37 
4.37 
4.3S 
4.39 
4.40 

4.41 
4.41 
4.42 
4.43 
4.44 

4.45 
4.45 
4.46 

4.47  4.47 

4.48  4.47 


4.49 
4.49 
4.50 
4.51 
4.52 


4.53 
4.53 
4.54 
4.55 
4.56 

4.57 
4.57 
4.58 
4.59 
4.60 

4.61 
4.62 
4.62 
63 
4.64 


4.25 
4.26 
4.27 
4.27 
4.28 

4.29 
4.30 
4.30 
4.31 
4.32 

4.33 
4.33 
4.34 
4.35 
4.36 

4.37 
4.37 
4.38 
4.39 
4.40 

4.40 
4.41 
4.42 
4.43 
4.44 

4.44 
4.45 
4.46 


4.25 
4.26 
4.27 
4.27 
4.28 


4.48 
4.49 
4.50 
4.51 
4.51 


4.33 
4.33 
4.34 
4.35 
4.36 


52 

53 

4.54 

4.54 

4.55 

4.56 
4.57 
4.58 
4.58 
4.59 


4.60 
4.61 
4.62 
4.63 
4.63 


4.40 
4.41 
4.42 
4.42 
4.43 

4.44 
4.45 
4.46 
4.46 
4.47 

4.48 
4.49 
4.49 
4.50 
4.51 

4.52 
4.52 
4.53 
4.54 
4.55 

4.56 
4.56 
4.57 
4.58 
4.59 


95.0  4.71  4.704. 69|4. 684. 67  4.66  4.66  4. 65]4. 64  4.64  4.63  4.62  4.62  4.61  4.61 


00 

60 

4.61 

4.62 

4.63 


4.25 
4.26 
4.26 
4.27 
4.28 

4.29 
4.29 
4.30 
4.31 
4.32 

4.32 
4.33 
4.34 
4.35 
4.35 

4.36 
4.37 
4.38 
4.38 
4.39 

4.40 
4.41 
4.41 
4.42 
4.43 

4.44 
4.44 
4.45 
4.46 
4.47 

4.47 
4.48 
4.49 
4.50 
4.51 


4.51 
4.52 
4.53 
4.54 
4.54 

4.55 
4.56 
4.57 
4.58 
4.58 

4.59 

4.60 

4.61 

61 

62 


4.25 
4.26 
4.26 
4.27 
4.28 

4.29 
4.29 
4.30 
4.31 
4.32 

4.32 
4.33 
4.34 
4.35 
4.35 

4.36 
4.37 
4.37 
4.38 
4.39 

4.40 
4.40 
4.41 
4.42 
4.43 

4.43 
4.44 
4.45 
4.46 
4.46 

4.47 
4.48 
4.49 
4.49 
4.50 


4.51 
4  52 
4.52 
4.53 
4.54 

4.55 
4.56 
4.56 
4.57 
4.58 

4.59 
4.59 
4.60 
4.61 
4.62 


4.25 
4.26 
4.26 
4.27 
4.28 

4.29 
4.29 
4.30 
4.31 
4.31 

4.32 
4.33 
4.34 
4.34 
4.35 

4.36 
4.37 
4.37 
4.38 
4.39 

4.39 
4.40 
4.41 
4.42 
4.42 

4.43 
4.44 
4.44 

4.45  4.45 

4.46  4.46 


4.25 
4.26 
4.26 
4.27 
4.28 

4.29 
4.29 
4.30 
4.31 
4.31 

4.32 
4.33 
4.34 
4.34 
4  35 

4.36 
4.36 
4.37 
4.38 
4.39 

4.39 
4.40 
4.41 
4.41 
4.42 

4.43 

4.44 

44 


4.25 
4.26 
4.26 
4.27 
4.28 


29 

29 

4.30 

4.31 

4.31 

4.32 
4.33 
4.33 
4.34 
4.35 

4.36 
4  36 
4.37 
4.38 
4.38 


4.47 
4.47 
4. 48 
4.49 
4.50 


4.51 
4.51 
4.52 
4  53 
4.54 

4.54 
4.55 
4.56 
4.57 
4.57 

4.58 
4.59 
4.60 
4.60 
4.61 


4.46 
4.47 
4.48 
4.49 
4.49 

4.50 
4.51 
4.52 
4.52 
4.53 

4.54 
4.55 
4.55 
4.56 
4.57 

4.58 
4.58 
4.59 
4.60 
4.61 


4.39 
4.40 
4.40 
4.41 
4.42 

4.43 
4.43 
4.44 
4.45 
4.45 

4.46 
4.47 
4.48 
4.48 
4.49 

4.50 
4.51 
4.51 
4.52 
4.53 

4.54 
4.54 
4.55 
4.56 
4.57 

4.57 
4.58 
4.59 
4.60 
4.60 


117 


4^/4  %     Bond — Interest  payable  semi-annually 
RATES  OF  INTEREST  R:  ALIZED 

if  purchased  at  prices  indicated  and  held  to  maturity 


Price 

YEARS  TO  RUN 

Price 
100  0 

23 

4.25 

23  H 
1.25 

24 
4.25 

24  H 

4.25 

25 

25H 
4.25 

26 
4.25 

26<4 
4.25 

27 
4.25 

-'7', 
4.25 

28 
4.25 

28K 
4.25 

29 
4.25 

29)/2 
4.25 

30 

4.25 

100  0 

4.25 

99.9 

4.26 

4.26 

4.26 

4.26 

4.26 

4.26 

4.26 

4  26 

4.26 

4.26 

4.26 

4.26 

4.26 

4.26 

4.26 

99.9 

99.8 

4.26 

4.26 

4.26 

4.26 

4.26 

4.26 

4.26 

1    JO 

4.26 

4.26 

4.26 

4.26 

4.26 

4.26 

4.26 

99.8 

99.7 

4.27 

4.27 

4.27 

4.27 

4.27 

4.27 

4.27 

i.27 

4.27 

4.27 

4.27 

4.27 

4.27 

4.27 

4.27 

99.7 

99.6 

4.28 

4.28 

4.28 

4.28 

4.28 

4.28 

4.28 

4.27 

4.27 

4.27 

4.27 

4.27 

4.27 

4.27 

4.27 

99.6 

99.5 

4.29 

4.28 

4.28 

4.28 

4.28 

4.28 

4.28 

4.28 

4.28 

4.28 

4.28 

4.28 

4.28 

4.28 

4.28 

99.5 

99.4 

4.29 

4.29 

4.29 

4.29 

4.29 

4.29 

4.29 

4.29 

4.29 

4.29 

4.29 

4.29 

4.29 

4.29 

4.29 

99.4 

99.3 

4.30 

4.30 

4.30 

4.30 

4.30 

4.29 

4.29 

4.29 

4.29 

4.29 

4.29 

4.29 

4.29 

4.29 

4.29 

99.3 

99.2 

4.31 

4.30 

4.30 

4.30 

4.30 

4.30 

4.30 

4.30 

4.30 

4.30 

4.30 

4.30 

4.30 

4.30 

4.30 

99.2 

99.1 

4.31 

4.31 

4.31 

4.31 

4.31 

4.31 

4.31 

4.31 

4.31 

4.31 

4.31 

4.30 

4.30 

4.30 

4.30 

99.1 

99  0 

4.32 

4.32 

4.32 

4.32 

4.32 

4.31 

4.31 

4.31 

4.31 

4.31 

4.31 

4.31 

4.31 

4.31 

4.31 

99  0 

98.9 

4.33 

4.32 

4.32 

4.32 

4.32 

4.32 

4.32 

4.32 

4.32 

4.32 

4.32 

4.32 

4.32 

4.32 

4.32 

98.9 

98.8 

4.33 

4.33 

4.33 

4.33 

4.33 

4.33 

4.33 

4.33 

4.33 

4.32 

4.32 

4.32 

4.32 

4.32 

4.32 

98.8 

98.7 

4.34 

4.34 

4.34 

4.34 

4.34 

4.33 

4.33 

4.33 

4.33 

4.33 

4.33 

4.33 

4.33 

4.33 

4.33 

98.7 

98.6 

4.35 

4.35 

4.34 

4.34 

4.34 

4.34 

4.34 

4.34 

4.34 

4.34 

4.34 

4.34 

4.34 

4.33 

4.33 

98.6 

98.5 

4.35 

4.35 

4.35 

4.35 

4.35 

4.35 

4.35 

4.35 

4.35 

4.34 

4.34 

4.34 

4.34 

4.34 

4.34 

98.5 

98.4 

4.36 

4.36 

4.36 

4.36 

4.36 

4.35 

4.35 

4.35 

4.35 

4.35 

4.35 

4.35 

4.35 

4.35 

4.35 

98.4 

98.3 

4.37 

4.37 

4.36 

4.36 

4.36 

4.36 

4.36 

4.36 

4.36 

4.36 

4.36 

4.35 

4.35 

4.35 

4.35 

98.3 

98.2 

4.37 

4.37 

4.37 

4.37 

4.37 

4.37 

4.37 

4.36 

4.36 

4.36 

4.36 

4.36 

4.36 

4.30 

4.36 

98.2 

98.1 

4.38 

4.38 

4.38 

4.38 

4.38 

4.37 

4.37 

4.37 

4.37 

4.37 

4.37 

4.37 

4.37 

4.37 

4.36 

9S.1 

98  0 

4.39 

4.39 

4.38 

4.38 

4.38 

4.38 

4.38 

4.38 

4.38 

4.38 

4.38 

4.37 

4.37 

4.37 

4.37 

98  0 

97.9 

4.40 

4.39 

4.39 

4.39 

4.39 

4.39 

4.39 

4.38 

4.38 

4.38 

4.38 

4.38 

4.38 

4.38 

4.38 

97.9 

97.8 

4.40 

4.40 

4.40 

4.40 

4.40 

4.39 

4.39 

4.39 

4.39 

4.39 

4.39 

4.39 

4.39 

4.38 

4.38 

97.8 

97.7 

4.41 

4.41 

4.41 

4.40 

4.40 

4.40 

4.40 

4.40 

4.40 

4.40 

4.39 

4.39 

4.39 

4.39 

4.39 

97.7 

97.6 

4.42 

4.41 

4.41 

4.41 

4.41 

4.41 

4.41 

4.40 

4.40 

4.40 

4.40 

4.40 

4.40 

4.40 

4.39 

97.6 

97.5 

4.42 

4.42 

4.42 

4.42 

4.42 

4.41 

4.41 

4.41 

4.41 

4.41 

4.41 

4.41 

4.40 

4.40 

4.40 

97.5 

97.4 

4.43 

4.43 

4.43 

4.42 

4.42 

4.42 

4.42 

4.42 

4.42 

4.41 

4.41 

4.41 

4.41 

4.41 

4.41 

97.4 

97.3 

4.44 

4.44 

4.43 

4.43 

4.43 

4.43 

4.43 

4.42 

4.42 

4.42 

4.42 

4.42 

4.42 

4.41 

4.41 

97.3 

97.2 

4.44 

4.44 

4.44 

4.44 

4.44 

4.43 

4.43 

4.43 

4.43 

4.43 

4.43 

4.42 

4.42 

4.42 

4.42 

97.2 

97.1 

4.45 

4.45 

4.45 

4.45 

4.44 

4.44 

4.44 

4.44 

4.44 

4.43 

4.43 

4.43 

4.43 

4.43 

4.43 

97.1 

97  0 

4.46 

4.46 

4.45 

4.45 

4.45 

4.45 

4.45 

4.44 

4.44 

4.44 

4.44 

4.44 

4.43 

4.43 

4.43 

97.0 

96.9 

4.47 

4.46 

4.46 

4.46 

4.46 

4.45 

4.45 

4.45 

4.45 

4.45 

4.44 

4.44 

4.44 

4.44 

4.44 

96.9 

96.8 

4.47 

4.47 

4.47 

4.47 

4.46 

4.46 

4.46 

4.46 

4.46 

4.45 

4.45 

4.45 

4.45 

4.44 

4.44 

96.8 

96.7 

4.48 

4.48 

4.48 

4.47 

4.47 

4.47 

4.47 

4.46 

4.46 

4.46 

4.46 

4.46 

4.45 

4.45 

4.45 

96.7 

96.6 

4.49 

4.48 

4.48 

4.48 

4.48 

4.47 

4.47 

4.47 

4.47 

4.47 

4.46 

4.46 

4.46 

4.46 

4.46 

96.6 

96.5 

4.50 

4.49 

4.49 

4.49 

4.48 

4.48 

4.48 

4.48 

4.48 

4.47 

4.47 

4.47 

4.47 

4.46 

4.46 

96.5 

96.4 

4.50 

4.50 

4.50 

4.49 

4.49 

4.49 

4.49 

4.48 

4.48 

4.48 

4.48 

4.47 

4.47 

4.47 

4.47 

96.4 

96.3 

4.51 

4.51 

4.50 

4.50 

4.50 

4.49 

4.49 

4.49 

4.49 

4.49 

4.48 

4.48 

4.48 

4.48 

4.48 

96.3 

96.2 

4.52 

4.51 

4.51 

4.51 

4.50 

4.50 

4.50 

4.50 

4.49 

4.49 

4.49 

4.49 

4.49 

4.48 

4.48 

96.2 

96.1 

4.52 

4.52 

4.52 

4.51 

4.51 

4.51 

4.51 

4.50 

4.50 

4.50 

4.50 

4.49 

4.49 

4.49 

4.49 

96.1 

96  0 

4.53 

4.53 

4.52 

4.52 

4.52 

4.51 

4.61 

4.51 

4.51 

4.51 

4.50 

4.50 

4.50 

4.50 

4.49 

96.0 

95.9 

4.54 

4.54 

4.53 

4.53 

4.53 

4.52 

4.52 

4.52 

4.51 

4.51 

4.51 

4.51 

4.50 

4.50 

4.50 

95.9 

95.8 

4.55 

4.54 

4.54 

4.53 

4.53 

4.53 

4.53 

4.52 

4.52 

4.52 

4.52 

4.51 

4.51 

4.51 

4.51 

95.8 

95.7 

4.55 

4.55 

4.55 

4.54 

4.54 

4.54 

4.53 

4.53 

4.53 

4.53 

4.52 

4.52 

4.52 

4.52 

4.51 

95.7 

95.6 

4.56 

4.56 

4.55 

4.55 

4.55 

4.54 

4.54 

4.64 

4.53 

4.53 

4.53 

4.53 

4.52 

4.52 

4.52 

95.6 

95.5 

4.57 

4.56 

4.56 

4.56 

4.55 

4.55 

4.55 

4.54 

4.54 

4.54 

4.54 

4.53 

4.53 

4.53 

4  53 

95.5 

95.4 

4.58 

4.57 

4.57 

4.56 

4.56 

4.6C 

4.65 

4 .  55 

4.55 

4.55 

4.54 

4.54 

4.54 

4.53 

4.53 

95.4 

95.3 

4.58 

4.68 

4.57 

4.67 

4.57 

4.50 

4.56 

4.56 

4.55 

4.65 

4.55 

4.54 

4.54 

4.54 

4.54 

95.3 

95.2 

4.59 

4.50 

4.58 

4.58 

4.67 

4.67 

4.57 

4.56 

4.56 

4.56 

4.65 

4.55 

4.55 

4.55 

4.55 

95.2 

95.1 

4.60 

4.59 

4.68 

4.58 

4.58 

4. 58 

4.57 

4.57 

4.57 

4.57 

4.56 

4.56 

4.56 

4.55 

4.55 

95.1 

95.0 

4.60 

4.6C 

4.6C 

4.51) 

4.59 

4.5S 

4.68 

4.58 

4.57 

4.57 

4.57 

4.56 

4.56 

4.56 

4.56 

95.0 

118 


4^4  %     Bond — Interest  payable  semi-annually 

RATES  OF  INTEREST  REALIZED 

if  purchased  at  prices  indicated  and  held  to  maturity 

Price 

YEARS  TO  RUN 

Price 

8 

w% 

9 

9H 

10 

10J* 

11 

11H 

12 

12H 

13 

13>* 

14 

14H 

15 

95  0 

5.02 

4.98 

4.94 

4.91 

4.89 

4.86 

4.84 

4.82 

4.80 

4.79 

4.77 

4.76 

4.74 

4.73 

4.72 

95  0 

94.9 

5.03 

4.99 

4.96 

4.93 

4.90 

4.88 

4.85 

4.83 

4.82 

4.80 

4.78 

4.77 

4.75 

4.74 

4.73 

94.9 

94.8 

5.05 

5.01 

4.97 

4.94 

4.91 

4.89 

4.87 

4.85 

4.83 

4.81 

4.79 

4.78 

4.76 

4.75 

4.74 

94.8 

94.7 

5.06 

5.02 

4.99 

4.96 

4.93 

4.90 

4.88 

4.86 

4.84 

4.82 

4.80 

4.79 

4.77 

4.76 

4.75 

94.7 

94.6 

5.08 

5.04 

5.00 

4.97 

4.94 

4.92 

4.89 

4.87 

4.85 

4.83 

4.81 

4.80 

4.78 

4.77 

4.76 

94.6 

94.5 

5.10 

5.05 

5.02 

4.98 

4.95 

4.93 

4.90 

4.88 

4.86 

4.84 

4.82 

4.81 

4.79 

4.78 

4.77 

94.5 

94.4 

5.11 

5.07 

5.03 

5.00 

4.97 

4.94 

4.92 

4.89 

4.87 

4.85 

4.83 

4.82 

4.80 

4.79 

4.78 

94.4 

94.3 

5.13 

5.08 

5.05 

5.01 

4.98 

4.95 

4.93 

4.90 

4  88 

4.86 

4.85 

4.83 

4.81 

4.80 

4.79 

94.3 

94.2 

5.14 

5.10 

5.06 

5.03 

4.99 

4.97 

4.94 

4.92 

4.90 

4.88 

4.86 

4.84 

4.83 

4.81 

4.80 

94.2 

94.1 

5.16 

5.11 

5.08 

5.04 

5.01 

4.98 

4.95 

4.93 

4.91 

4.89 

4.87 

4.85 

4.84 

4.82 

4.81 

94.1 

94  0 

5.18 

5.13 

5.09 

5.05 

5.02 

4.99 

4.96 

4.94 

4.92 

4.90 

4.88 

4.86 

4.85 

4.83 

4.82 

94  0 

9.3.9 

5.19 

5.15 

5.10 

5.07 

5.03 

5.00 

4.98 

4.95 

4.93 

4.91 

4.89 

4.87 

4.86 

4.84 

4.83 

93.9 

93.8 

5.21 

5.16 

5.12 

5.08 

5.05 

5.02 

4.99 

4.96 

4.94 

4.92 

4.90 

4.88 

4.87 

4.85 

4.84 

93.8 

93.7 

5.22 

5.18 

5.13 

5.10 

5.06 

5.03 

5.00 

4.98 

4.95 

4.93 

4.91 

4.89 

4.88 

4.86 

4.85 

93.7 

93.6 

5.24 

5.19 

5.15 

5.11 

5.07 

5.04 

5.01 

4.99 

4.96 

4.94 

4.92 

4.90 

4.89 

4.87 

4.86 

93.6 

93.5 

5.26 

5.21 

5.16 

5.12 

5  09 

5.06 

5.03 

5.00 

4.98 

4.95 

4.93 

4.92 

4.90 

4.88 

4.87 

93.5 

93.4 

5.22 

5.18 

5.14 

5.10 

5.07 

5.04 

5.01 

4.99 

4.97 

4.94 

4.93 

4.91 

4.89 

4.87 

93.4 

93.3 

5.24 

5.19 

5.15 

5.11 

5.08 

5.05 

5.02 

5.00 

4.98 

4.96 

4.94 

4.92 

4.90 

4.88 

93.3 

93.2 

5.25 

5.21 

5.16 

5.13 

5.09 

5.06 

5.04 

5.01 

4.99 

4.97 

4.95 

4.93 

4.91 

4.89 

93.2 

93.1 

5.22 

5.18 

5.14 

5.11 

5.08 

5.05 

5.02 

5.00 

4.98 

4.96 

4.94 

4.92 

4.90 

93.1 

93.0 

5.24 

5.19 

5.15 

5.12 

5.09 

5.06 

5.03 

5.01 

4.99 

4.97 

4.95 

4.93 

4.91 

93  0 

92.9 

5.25 

5.21 

5.17 

5.13 

5.10 

5.07 

5.05 

5.02 

5.00 

4.98 

4.96 

4.94 

4.92 

92.9 

92.8 

5.22 

5.18 

5.15 

5.11 

5.08 

5.06 

5.03 

5.01 

4.99 

4.97 

4.95 

4.93 

92.8 

92.7 

5.23 

5.19 

5.16 

5.13 

5.10 

5.07 

5.04 

5.02 

5.00 

4.98 

4.96 

4.94 

92.7 

92.6 

5.25 

5.21 

5.17 

5.14 

5.11 

5.08 

5.06 

5.03 

5.01 

4.99 

4.97 

4.95 

92.6 

92.5 

5.22 

5.19 

5.15 

5.12 

5.09 

5.07 

5.04 

5.02 

5.00 

4.98 

4.97 

92.5 

92.4 

5.24 

5.20 

5.16 

5.13 

5.10 

5.08 

5.06 

5.03 

5.01 

4.99 

4.98 

92.4 

92.3 

5.25 

5.21 

5.18 

5.15 

5.12 

5.09 

5.07 

5.04 

5.02 

5.00 

4.99 

92.3 

92.2 

5.22 

5.19 

5.16 

5.13 

5.10 

5.08 

5.05 

5.03 

5.01 

5.00 

92.2 

92.1 

5.24 

5.20 

5.17 

5.14 

5.11 

5.09 

5.07 

5.04 

5.02 

5.01 

92.1 

92  0 

5.25 

5.21 

5.18 

5.15 

5.12 

5.10 

5.08 

5.05 

5.03 

5.02 

93.0 

91.9 

5.23 

5.19 

5.16 

5.14 

5.11 

5.09 

5.06 

5.04 

5.03 

91.9 

91.8 

5.24 

5.21 

5.18 

5.15 

5.12 

5.10 

5.08 

5.05 

5.04 

91.8 

91.7 

5.25 

5.22 

5.19 

5.16 

5.13 

5.11 

5.09 

5.07 

5.05 

91.7 

91.6 

5.23 

5.20 

5.17 

5.14 

5.12 

5.10 

5.08 

5.06 

91.6 

91.5 

5.24 

5.21 

5.18 

5.16 

5.13 

5.11 

5.09 

5.07 

91.5 

91.4 

5.26 

5.22 

5.19 

5.17 

5.14 

5.12 

5.10 

5.08 

91.4 

91.3 

5.24 

5.21 

5.18 

5.15 

5.13 

5.11 

5.09 

91.3 

91.2 

5.25 

5.22 

5.19 

5.16 

5.14 

5.12 

5.10 

91.2 

91.1 

5.23 

5.20 

5.17 

5.15 

5.13 

5.11 

91.1 

91.0 

5.24 

5.21 

5.18 

5.16 

5.14 

5.12 

91.0 

90.9 

5.25 

5.22 

5.20 

5.17 

5.15 

5.13 

90.9 

90.8 

5.23 

5.21 

5.18 

5.16 

5.14 

90.8 

90.7 

5.25 

5.22 

5.19 

5.17 

5.15 

90.7 

90.6 

5.23 

5.20 

5.18 

5.16 

90.6 

90.5 

5.24 

5.21 

5.19 

5  17 

90.5 

90.4 

5.25 

5.22 

5.20 

5.18 

90.4 

90.3 

5.24 

5.21 

5.19 

90.3 

90.2 

5.25 

5.22 

5.20 

90.2 

90.1 

5.23 

5.21 

90.1 

90.0 

5.24 

5.22 

90.0 

119 


4^  %     Bond — Interest  payable  semi-annually 

RATES  OF  INTEREST  REALIZED 

if  purchased  at  prices  indicated  and  held  to  maturity 

YEARS  TO  RUN 

Price 
9.5  0 

95  0 

15M 

4.71 

16 

16H 

4.60 

17 

1732 

4.67 

18 
4.66 

1V_, 

19 
4.6.5 

19J4 
4.04 

20 

201'. 

21 

4.62 

21  •, 
4.62 

22 
4.61 

22  Vi 

4.70 

4.68 

4.66 

4.64 

4.63 

4.61 

94.9 

4.72 

4.71 

4.70 

4.69 

4.  OS 

4.67 

4.66 

4.66 

4.65 

4.64 

4.64 

4.63 

4.63 

4.62 

4.62 

94.9 

94.8 

4.73 

4.72 

4.71 

4.70 

4.69 

4.68 

4.67 

4.66 

4.66 

4.65 

4.65 

4.64 

4.63 

4.63 

4.62 

94.8 

94.7 

4.74 

4.73 

4.72 

4.71 

4.70 

4.69 

4.68 

4.67 

4.67 

4.66 

4.65 

4.65 

4.64 

4.64 

4.63 

94.7 

94.6 

4.75 

4.74 

4.72 

4.72 

4.71 

4.70 

4.69 

4.68 

4.67 

4.67 

4.66 

4.66 

4.65 

4.64 

4.64 

94.6 

94.5 

4.76 

4.75 

4.73 

4.73 

4.72 

4.71 

4.70 

4.69 

4.68 

4.68 

4.67 

4.66 

4.66 

4.65 

4.65 

94.5 

94.4 

4.77 

4.75 

4.74 

4.73 

4.72 

4.72 

4.71 

4.70 

4.69 

4.68 

4.68 

4.67 

4.66 

4.66 

4.65 

94.4 

94.3 

4.78 

4.76 

4.75 

4.74 

4.73 

4.72 

4.71 

4.71 

4.70 

4.69 

4.68 

4.68 

4.67 

4.67 

4.66 

94.3 

94.2 

4.78 

4.77 

4.76 

4.75 

4.74 

4.73 

4.72 

4  72 

4.71 

4.70 

4.69 

4.69 

4.68 

4.67 

4.67 

94.2 

94.1 

4.79 

4.78 

4.77 

4.76 

4.75 

4.74 

4.73 

4.72 

4.72 

4.71 

4.70 

4.69 

4.69 

4.68 

4.68 

94.1 

94  0 

4.80 

4.79 

4.78 

4.77 

4.76 

4.75 

4.74 

4.73 

4.72 

4.72 

4.71 

4.70 

4  70 

4.69 

4.68 

94  0 

93.9 

4.81 

4. SO 

4.79 

4.78 

4.77 

4.76 

4.75 

4.74 

4.73 

4.72 

4.72 

4.71 

4.70 

4.70 

4.69 

93.9 

93.8 

4.82 

4.81 

4.80 

4.79 

4.78 

4.77 

4.76 

4.75 

4.74 

4.73 

4.72 

4.72 

4.71 

4.71 

4.70 

93.8 

93.7 

4.83 

4.82 

4.81 

4.80 

4.79 

4.78 

4.77 

4.76 

4.75 

4.74 

4.73 

4.73 

4.72 

4.71 

4.71 

93.7  ■ 

93.0 

4.84 

4.83 

4.82 

4.81 

4.80 

4.79 

4.77 

4.77 

4.76 

4.75 

4.73 

4.74 

4.73 

4.72 

4.71 

93.6 

93.5 

4.85 

4.84 

4.83 

4.82 

4.80 

4.79 

4.78 

4.77 

4.77 

4.76 

4.75 

4.74 

4.74 

4.73 

4.72 

93.5 

93.4 

4.86 

4.85 

4.84 

4.82 

4.81 

4.80 

4.79 

4.78 

4.77 

4.77 

4.76 

4.75 

4.74 

4.74 

4.73 

93.4 

93.3 

4.87 

4.86 

4.84 

4.83 

4.82 

4.81 

4.80 

4.79 

4.78 

4.77 

4.77 

4.76 

4.75 

4.74 

4.74 

93.3 

93.2 

4.88 

4.87 

4.85 

4.84 

4.83 

4.82 

4  81 

4.80 

4  79 

4.78 

4.77 

4.77 

4.76 

4.75 

4.74 

93.2 

93.1 

4.89 

4.88 

4.86 

4.85 

4.84 

4.83 

4.82 

4.81 

4.80 

4.79 

4.78 

4.77 

4.77 

4.76 

4.75 

93.1 

93  0 

4.90 

4.89 

4.87 

4.86 

4.85 

4.81 

4  83 

4.82 

4.81 

4.80 

4.79 

4.78 

4.77 

4.77 

4.76 

93  0 

92.9 

4.91 

4.90 

4.88 

4.87 

4.86 

4.85 

4.83 

4.82 

4.82 

4.81 

4.80 

4.79 

4.78 

4.77 

4.77 

92.9 

92.8 

4.92 

4.91 

4.89 

4.88 

4.87 

4.86 

4.84 

4.83 

4.82 

4.81 

4.81 

4.80 

4.79 

4.78 

4.78 

92.8 

92.7 

4.93 

4.91 

4.90 

4.89 

4.S8 

4.86 

4.85 

4.84 

4  83 

4.82 

4.81 

4.81 

4.80 

4.79 

4.78 

92.7 

92.6 

4.94 

4.92 

4.91 

4.90 

4.8S 

4.87 

4.86 

4.85 

4.84 

4.83 

4.82 

4.81 

4.81 

4.80 

4.79 

92.6 

92.5 

4.95 

4.93 

4.92 

4.91 

4.89 

4.88 

4.87 

4.86 

4.85 

4.84 

4.83 

4.82 

4.81 

4.81 

4.80 

92.5 

92.4 

4.96 

4.94 

4.93 

4.92 

4.90 

4.89 

4.88 

1.87 

1 .  86 

4.85 

4.84 

4.83 

4.82 

4.81 

4.81 

92.4 

92.3 

4.97 

4.95 

4.94 

4.92 

4.91 

4.90 

4.89 

4.88 

4.87 

4.86 

4.85 

4.84 

4.83 

4.82 

4.81 

92.3 

92.2 

4.98 

4.96 

4.95 

4.93 

4.92 

4  91 

4.89 

4.88 

4.87 

4  86 

4.85 

4.85 

4.84 

4.83 

4.82 

92.2 

92.1 

4.99 

4.97 

4.96 

4.94 

4.93 

4.92 

4.90 

4.89 

4.88 

4.87 

4.86 

4.85 

4.85 

4.84 

4.83 

92.1 

92  0 

5.00 

4.98 

4.97 

4.95 

4  94 

4.93 

4.91 

4.90 

4.89 

4.88 

4.87 

4.86 

4  85 

4. 85 

4.84 

92.0 

91.9 

5.01 

4.99 

4.98 

4.96 

4.95 

4.94 

4.92 

4.91 

4.90 

4.89 

4.88 

4.87 

4.86 

4.85 

4.85 

91.9 

91.8 

5.02 

5 .  00 

4.99 

4.97 

4.96 

4.94 

4.93 

4.92 

4.91 

4.90 

4.89 

4.88 

4.87 

4.86 

4.85 

91.8 

91.7 

5.03 

5.01 

4  99 

4.98 

4.97 

4.95 

4.94 

4.93 

4.92 

4.91 

4.90 

4.89 

4.88 

4.87 

4.86 

91.7 

91.0 

5.04 

5.02 

5.00 

4.99 

4.97 

1.96 

4.95 

4.94 

4.92 

4.91 

4.90 

4.89 

4.89 

4.88 

4.87 

91.6 

91.5 

5.05 

5.03 

5.01 

5  00 

4.98 

4  97 

4.96 

4.95 

4.93 

4  92 

4.91 

4.90 

4.89 

4.89 

4.88 

91.5 

91.4 

5.06 

5.04 

5.02 

5.01 

4.99 

1    US 

4.97 

4.95 

4  94 

4  93 

4.92 

4.91 

4.90 

4.89 

4.88 

91.4 

91.3 

5.07 

5.05 

5.03 

5.02 

5.00 

t  99 

1  98 

4.96 

4.95 

4.94 

4.93 

1.92 

4  91 

1.90 

4.89 

91.3 

91.2 

5  08 

5.00 

5.04 

5  03 

5.01 

5.00 

4.98 

4.97 

4.90 

4 . 9.5 

4.94 

4.93 

4.92 

4.91 

4  90 

91.2 

91.1 

5.09 

5.07 

5.05 

5.04 

5.02 

5.01 

4.99 

4.98 

4.97 

4.96 

4.95 

4.94 

4.93 

4.92 

4.91 

91.1 

91  0 

5.10 

5.08 

5.06 

5  05 

5 .  03 

5.02 

5.00 

4.99 

4.98 

4.96 

4.95 

4.94 

4  93 

4.92 

4.92 

91  0 

90.9 

5.11 

5.09 

5  07 

5.06 

5.01 

5.03 

5.01 

5.00 

4.98 

4.97 

4  96 

4.95 

4.94 

4.93 

4  92 

90.9 

90.8 

5.12 

5.10 

5.08 

5.06 

5.0.5 

5  03 

5.02 

5.01 

1    99 

4.98 

4.97 

1.96 

4.95 

4.94 

4.93 

90.8 

90.7 

5.13 

5.11 

5.09 

5.07 

5  06 

5.04 

5.03 

5   01 

5   OH 

4.99 

4.98 

4.97 

4  96 

4.95 

4.94 

90.7 

90.6 

5 .  14 

5.12 

5.10 

5.08 

5.07 

5.05 

5.04 

5.02 

5.01 

5.00 

4.99 

4.9S 

4.97 

4.96 

4.95 

90.6 

90.5 

5.15 

5.13 

5.11 

5.09 

5.08 

5.06 

5.05 

5.03 

5.02 

5.01 

5.00 

4.99 

4.98 

4.96 

4.96 

90.5 

90.4 

5.10 

5.14 

5.12 

5.10 

5   O'J 

5.07 

5.00 

5.04 

5.03 

5.02 

5.00 

4.99 

4.98 

4.97 

1.96 

90.4 

90.3 

5.17 

5.15 

5.13 

5.11 

5.09 

5.08 

5.07 

5.05 

5.04 

5 .  02 

5.01 

5.00 

4.99 

4.98 

1.97 

90.3 

90.2 

5.18 

5.16 

5.14 

5.12 

5.10 

5.09 

5.07 

5.00 

5.05 

5.03 

5.02 

5.01 

5.00 

4.99 

4 .  98 

90.2 

90.1 

5.19 

5.17 

5 .  15 

5.13 

5.11 

5.10 

5.08 

5.07 

5.06 

5.04 

5.03 

5.02 

5.01 

5.00 

4.99 

90.1 

90  0 

5.20 

5. 1S| 

5.16 

5.14 

5.12 

5.11 

5.09 

5.08 

5.06 

5.05 

5.04 

5.03 

5.02 

5.00 

4.99 

90  0 

120 


4^4  %    Bond — Interest  payable  semi-annually 

RATES  OF  INTEREST  REALIZED 
if  purchased  at  prices  indicated  and  held  to  maturity 


Price 

YEARS  TO  RUN 

Price 

23 

4.60 

23K 

24 

24^ 
4.59 

25 

4.59 

25H 

4.58 

26 

26^ 
4.58 

27 

27^ 

28 
4.57 

28^ 
4.56 

29 

29^ 

30 

95  0 

4.60 

4.60 

4.58 

4.57 

4.57 

4.56 

4.56 

4.56 

95  0 

94.9 

4.61 

4.61 

4.60 

4.60 

4.60 

4.59 

4.59 

4.58 

4.58 

4.58 

4.57 

4.57 

4.57 

4.57 

4.56 

94.9 

94.8 

4.62 

4.61 

4.61 

4.61 

4.60 

4.60 

4.59 

4.59 

4.59 

4.59 

4.58 

4.58 

4.57 

4.57 

4.57 

94.8 

94.7 

4.63 

4.62 

4.62 

4.61 

4.61 

4.61 

4.60 

4.60 

4.59 

4.59 

4.59 

4.58 

4.58 

4.58 

4.58 

94.7 

94.6 

4.63 

4.63 

4.62 

4.62 

4.62 

4.61 

4.61 

4.60 

4.60 

4.60 

4.59 

4.59 

4.59 

4.59 

4.58 

94.6 

94.5 

4.64 

4.64 

4  63 

4.63 

4.62 

4.62 

4.62 

4.61 

4.61 

4.61 

4.60 

4.60 

4.59 

4.59 

4  59 

94.5 

94.4 

4.65 

4.64 

4.64 

4.63 

4.63 

4.63 

4.62 

4.62 

4.61 

4.61 

4.61 

4.60 

4.60 

4.60 

4.60 

94.4 

94.3 

4.66 

4.65 

4  65 

4.64 

4.64 

4.63 

4.63 

4.63 

4.62 

4.62 

4.61 

4.61 

4.61 

4.60 

4.60 

94.3 

94.2 

4.66 

4.66 

4.65 

4.65 

4.64 

4.64 

4.64 

4.63 

4.63 

4.62 

4.62 

4.62 

4.61 

4.61 

4.61 

94.2 

94.1 

4.67 

4.66 

4.66 

4.66 

4.65 

4.65 

4.64 

4.64 

4.64 

4.63 

4.63 

4.62 

4.62 

4.62 

4.62 

94.1 

94  0 

4.68 

4.67 

4.67 

4.66 

4.66 

4.65 

4.65 

4.65 

4.64 

4.64 

4.63 

4.63 

4.63 

4.62 

4.62 

94.0 

93.9 

4.69 

4.68 

4.67 

4.67 

4.67 

4.66 

4.66 

4.65 

4.65 

4  64 

4.64 

4  64 

4.63 

4.63 

4.63 

93.9 

93.8 

4.69 

4.69 

4.68 

4.68 

4.67 

4.67 

4.66 

4.66 

4.66 

4.65 

4.65 

4.64 

4.64 

4.64 

4.64 

93.8 

93.7 

4.70 

4.69 

4.69 

4.08 

4.68 

4.68 

4.67 

4.67 

4.66 

4.66 

4.65 

4.65 

4.65 

4.64 

4.64 

93.7 

93.6 

4.71 

4.70 

4.70 

4.69 

4.69 

4.68 

4.68 

4.67 

4.67 

4.67 

4.66 

4.66 

4.65 

4.65 

4.65 

93.6 

93.5 

4.72 

4.71 

4.70 

4.70 

4.69 

4.69 

4.68 

4.68 

4.68 

4.67 

4.67 

4.66 

4.66 

4  66 

4.66 

93.5 

93.4 

4.72 

4.72 

4.71 

4.71 

4.70 

4.70 

4.69 

4.69 

4.68 

4.68 

4.67 

4.67 

4.67 

4.66 

4.66 

93.4 

93.3 

4.73 

4.73 

4.72 

4.71 

4.71 

4.70 

4.70 

4.69 

4.69 

4.69 

4.68 

4.68 

4.67 

4.67 

4.67 

93.3 

93.2 

4.74 

4.73 

4.73 

4.72 

4.72 

4.71 

4.70 

4.70 

4.70 

4.69 

4.69 

4.68 

4.68 

4.68 

4.67 

93.2 

93.1 

4.75 

4.74 

4.73 

4.73 

4.72 

4.72 

4.71 

4.71 

4.70 

4.70 

4.70 

4.69 

4.69 

4.68 

4.68 

93.1 

93  0 

4.75 

4.75 

4.74 

4.74 

4.73 

4.72 

4.72 

4.71 

4.71 

4.71 

4.70 

4.70 

4.69 

4.69 

4.69 

93  0 

92.9 

4.76 

4.76 

4.75 

4.74 

4.74 

4.73 

4.73 

4.72 

4.72 

4.71 

4.71 

4.70 

4.70 

4.70 

4.69 

92.9 

92.8 

4.77 

4.76 

4.76 

4.75 

4.74 

4.74 

4.73 

4.73 

4.72 

4.72 

4.72 

4.71 

4.71 

4.70 

4.70 

92.8 

92.7 

4.78 

4.77 

4.76 

4.76 

4.75 

4.75 

4.74 

4.74 

4.73 

4.73 

4.72 

4.72 

4.71 

4.71 

4.71 

92.7 

92.6 

4.78 

4.78 

4.77 

4.77 

4.76 

4.75 

4.75 

4.74 

4.74 

4.73 

4.73 

4.73 

4.72 

4.72 

4.71 

92.6 

92.5 

4.79 

4.79 

4.78 

4.77 

4.77 

4.76 

4.76 

4.75 

4.75 

4.74 

4.74 

4.73 

4.73 

4.72 

4.72 

92.5 

92.4 

4.80 

4.79 

4.79 

4.78 

4.77 

4.77 

4.76 

4.76 

4.75 

4.75 

4.74 

4.74 

4.73 

4.73 

4.73 

92.4 

92.3 

4.81 

4.80 

4.79 

4.79 

4.78 

4.78 

4.77 

4.76 

4.76 

4.76 

4.75 

4.75 

4.74 

4.74 

4.73 

92.3 

92.2 

4.81 

4.81 

4.80 

4.80 

4.79 

4.78 

4.78 

4.77 

4.77 

4.76 

4.76 

4.75 

4.75 

4.74 

4.74 

92.2 

92.1 

4.82 

4.81 

4.81 

4.80 

4.80 

4.79 

4.78 

4.78 

4.77 

4.77 

4.76 

4.76 

4.76 

4.75 

4.75 

92.1 

93.0 

4.83 

4.82 

4.82 

4.81 

4.80 

4.80 

4.79 

4.79 

4.78 

4.78 

4.77 

4.77 

4.76 

4.76 

4.75 

92.0 

91.9 

4.84 

4.83 

4.82 

4.82 

4.81 

4.81 

4.80 

4.79 

4.79 

4.78 

4.78 

4.77 

4.77 

4.76 

4.76 

91.9 

91.8 

4.85 

4.84 

4.83 

4.82 

4.82 

4.81 

4.81 

4.80 

4.79 

4.79 

4.78 

4.78 

4.78 

4.77 

4.77 

91.8 

91.7 

4.85 

4.85 

4.84 

4.83 

4.83 

4.82 

4.81 

4.81 

4.80 

4.80 

4.79 

4.79 

4.78 

4.78 

4.77 

91.7 

91.6 

4.86 

4.85 

4.85 

4.84 

4.83 

4.83 

4.82 

4.81 

4.81 

4.80 

4.80 

4.79 

4.79 

4.78 

4.78 

91.6 

91.5 

4.87 

4.86 

4.85 

4.85 

4.84 

4.83 

4.83 

4.82 

4.82 

4.81 

4.81 

4.80 

4.80 

4.79 

4.79 

91.5 

91.4 

4.88 

4.87 

4.86 

4.85 

4.85 

4.84 

4.84 

4.83 

4.82 

4.82 

4.81 

4.81 

4.80 

4.80 

4.79 

91.4 

91.3 

4.88 

4.88 

4.87 

4.86 

4.85 

4.85 

4.84 

4.84 

4.83 

4.83 

4.82 

4.81 

4.81 

4.80 

4.80 

91.3 

91.2 

4.89 

4.88 

4.88 

4.87 

4.86 

4.86 

4.85 

4.84 

4.84 

4.83 

4.83 

4.82 

4.81 

4.81 

4.81 

91.2 

91.1 

4.90 

4.89 

4.88 

4.88 

4.87 

4.86 

4.86 

4.85 

4.84 

4.84 

4.83 

4.83 

4.82 

4.82 

4.81 

91.1 

91  0 

4.91 

4.90 

4.89 

4.88 

4.88 

4.87 

4.86 

4.86 

4.85 

4.85 

4.84 

4.83 

4.83 

4.82 

4.82 

91  0 

90.9 

4.92 

4.91 

4.90 

4.89 

4.88 

4.88 

4.87 

4.87 

4.86 

4.85 

4.85 

4.84 

4.84 

4.83 

4.83 

90.9 

90.8 

4  92 

4.92 

4.91 

4.90 

4.89 

4.88 

4.88 

4.87 

4.87 

4.86 

4.85 

4.85 

4.84 

4.84 

4.83 

90.8 

90.7 

4.93 

4.92 

4.91 

4.91 

4.90 

4.89 

4.89 

4.88 

4.87 

4.87 

4.86 

4.80 

4.85 

4.85 

4.84 

90.7 

90.6 

4.94 

4.93 

4.92 

4.91 

4.91 

4.90 

4.89 

4.89 

4.88 

4.87 

4.87 

4.86 

4.86 

4.85 

4.85 

90.6 

90.5 

4.95 

4.94 

4.93 

4.92 

4.91 

4.91 

4.90 

4.89 

4.89 

4.88 

4.88 

4.87 

4.86 

4.86 

4.86 

90.5 

90.4 

4.95 

4.95 

4.94 

4.93 

4.92 

4.91 

4.91 

4  90 

4.90 

1.89 

4.88 

4  88 

4.87 

4.87 

4.  SO 

90.4 

90.3 

4.96 

4.95 

4.95 

4.94 

4.93 

4.92 

4.91 

4.91 

4.90 

4.90 

4.89 

4.88 

4.8S 

4.87 

4.87 

90  3 

90.2 

4.97 

4.96 

4.95 

4.94 

4.94 

4.93 

4.92 

4.92 

4.91 

4.90 

4.90 

4.89 

4.89 

4.88 

4.88 

90.2 

90.1 

4.98 

4.97 

4.96 

4.95 

4.94 

4.94 

4.93 

4.92 

4.92 

4.91 

4.90 

4.90 

4.89 

4.89 

4.88 

90.1 

90  0 

4.99 

4.98 

4.97 

4.96 

4.95 

4.94 

4.94 

4.93 

4.92 

4.92 

4  91 

4.91 

4.90 

4.89 

4.89 

90  0 

121 


4%  %    Bond — Interest  Payable  semi-annually 

RATES  OF  INTEREST  REALIZED 
If  purchased  at  prices  indicated  and  held  to  maturity 


Price 


100  0 

99.9 
99.8 
99.7 
99.6 

99.5 
99.4 
99.3 
99.2 
99.1 

99  0 


98.7 
98.6 

98.5 
98.4 
98.3 
98.2 
98.1 

98  0 

97.9 
97.8 


YEARS  TO  RUN 


1        2        4        6        8       10 

mo.  mos.  mos.  mos.  mos.  mos 


4.70 
5.63 


4.71 
5.32 


4.73 
5  04 
5.34 


4.75 
4.95 
5.16 
5.37 


4.74 
4.89 
5.05 
5.20 
5.36 


5.36 


4.75 

4.85 

4 

5.06 

5.17 

5.27 


m 


4.75 
4.82 
4.89 
4  96 
5.03 

5.10 
5.17 
5.24 
5.31 


4.75 
4.80 
4.86 
4.91 
4.96 

5.02 
5.07 
5.12 
5.18 
5.23 

5.28 


ZH 


4.75 
4.79 
4.84 
4.88 
4.92 


5.18 
5.23 
5.27 


4.75 
4.79 
4.82 
4.86 
4.90 

4.93 
4.97 
5.00 
5.04 
5.08 

5.11 

5.15 
5.19 
5.22 
5.26 


3H 


4.75 
4.78 
4.81 
4.84 
4 

4.91 
4.94 
4.97 
5.00 
5.03 

5.07 
5.10 
5.13 
5.16 
5.19 

5.22 
5.26 


4.75 
4.78 
4.81 
4.83 
4. 

4.89 
4  92 
4.95 
4.97 
5.00 

5.03 
5.06 
5.09 
5.11 
5.14 

5.17 
5.20 
5.23 
5.26 


m 


4.75 
4.78 
4  80 
4.83 
4. 

4  88 
4.90 
4.93 
4.95 
4 


5.13 
5.15 
5.18 
5.20 
5.23 

5.25 


4.75 
4.77 
4.80 
4.82 
4.84 

4.86 

4. 

4.91 

4.93 

4.96 

4. 98 
5.00 
5.02 
5.05 
5.07 

5.09 
5.12 
5  14 
5.16 
5.19 

5.21 
5.23 
5.26 


122 


4^4  %    Bond — Interest  payable  semi-annually 

RATES  OF  INTEREST  REALIZED 

if  purchased  at  prices  indicated  and  held  to  maturity 

Price 

YEARS  TO  RUN 

Price 

1 

2 

4 

6 

8 

10 

1 

105.0 

mo. 

mos. 

mos. 

mos. 

mos. 

mos. 

yr. 

m 

2 

2H 

3 

2.99 

3H 
3.23 

4 
3.40 

4M 
3.54 

5 
3.65 

105  0 

104.9 

3.03 

3.26 

3.43 

3.56 

3.67 

104.9 

104.8 

3.06 

3.29 

3.45 

3.59 

3.69 

104.8 

104.7 

3.10 

3.32 

3.48 

3.61 

3.71 

104.7 

104.6 

3.13 

3.35 

3.51 

3.63 

3.73 

104.6 

104.5 

3.17 

3.38 

3.53 

3.66 

3.75 

104.5 

104.4 

3.20 

3.41 

3.56 

3.68 

3.78 

104.4 

104.3 

3.23 

3.44 

3.59 

3.70 

3.80 

104.3 

104.2 

2.99 

3.27 

3.47 

3.61 

3.73 

3.82 

104.2 

104.1 

3.04 

3.30 

3.50 

3.64 

3.75 

3.84 

104.1 

104.0 

3.08 

3.34 

3.53 

3.67 

3.78 

3.86 

104  0 

103.9 

3.12 

3.37 

3.56 

3.69 

3.80 

3.88 

103.9 

103.8 

3.16 

3.41 

3.59 

3.72 

3.82 

3.91 

103.8 

103.7 

3.20 

3.44 

3.62 

3.75 

3.85 

3.93 

103.7 

103.6 

3.24 

3.48 

3.65 

3.77 

3.87 

3.95 

103.6 

103.5 

3.28 

3.51 

3.68 

3.80 

3.89 

3.97 

103.5 

103.4 

2.99 

3.32 

3.54 

3.71 

3.82 

3.92 

3.99 

103.4 

103.3 

3.04 

3.36 

3.58 

3.74 

3.85 

3.94 

4.01 

103.3 

103.2 

3.09 

3.40 

3.61 

3.77 

3.88 

3.97 

4.04 

103.2 

103.1 

3.14 

3.44 

3.65 

3.80 

3.91 

3.99 

4.06 

103.1 

103.0 

3.19 

3.49 

3.68 

3.83 

3.93 

4.01 

4.08 

103.0 

102.9 

3.24 

3.53 

3.72 

3.86 

3.96 

4.04 

4.10 

102.9 

102.8 

3.29 

3.57 

3.75 

3.89 

3.99 

4.06 

4.12 

102.8 

102.7 

3.34 

3.61 

3.79 

3.92 

4.01 

4.09 

4.15 

102.7 

102.6 

2.97 

3.39 

3.65 

3.82 

3.95 

4.04 

4.11 

4.17 

102.6 

102.5 

3.03 

3.45 

3.69 

3.86 

3.98 

4.07 

4.13 

4.19 

102.5 

102.4 

3.10 

3.50 

3.74 

3.90 

4.01 

4.09 

4.16 

4.21 

102.4 

102.3 

3.17 

3.55 

3.78 

3.93 

4.04 

4.12 

4.18 

4.23 

102.3 

102.2 

3.24 

3.60 

3.82 

3.97 

4.07 

4.15 

4.21 

4.26 

102.2 

102.1 

3.30 

3.65 

3.86 

4.00 

4.10 

4.17 

4.23 

4.28 

102.1 

102  0 

3.37 

3.70 

3.90 

4.04 

4.13 

4.20 

4.26 

4.30 

103.0 

101.9 

3.44 

3.76 

3.94 

4.07 

4.16 

4.23 

4.28 

4.32 

101.9 

101.8 

2.91 

3.51 

3.81 

3.99 

4.11 

4.19 

4.26 

4.30 

4.35 

101.8 

101.7 

3.01 

3.58 

3.86 

4.03 

4.14 

4.22 

4.28 

4  33 

4.37 

101.7 

101.6 

3.11 

3.64 

3.91 

4.07 

4.18 

4.25 

4.31 

4.35 

4.39 

101.6 

101.5 

2.91 

3.21 

3.71 

3.96 

4.11 

4.21 

4.28 

4.34 

4.38 

4.41 

101.5 

101.4 

3.03 

3.32 

3.78 

4.02 

4.15 

4.25 

4.31 

4.37 

4.40 

4.43 

101.4 

101.3 

3.15 

3.42 

3.85 

4.07 

4.20 

4.28 

4.35 

4.39 

4.43 

4.46 

101.3 

101.2 

2.91 

3.27 

3.52 

3.92 

4.12 

4.24 

4.32 

4.38 

4.42 

4.45 

4.48 

101.2 

101.1 

3.06 

3.39 

3.62 

3.99 

4.17 

4.28 

4.35 

4.41 

4.45 

4.48 

4.50 

101.1 

101  0 

3.22 

3.52 

3.72 

4.06 

4.22 

4.32 

4.39 

4.44 

4.47 

4.50 

4.52 

101.0 

100.9 

2.92 

3.37 

3.64 

3.82 

4.13 

4.28 

4.37 

4.43 

4.47 

4.50 

4.53 

4.55 

100.9 

100.8 

3.13 

3.52 

3.76 

3.93 

4.19 

4.33 

4.41 

4.46 

4.50 

4.53 

4.55 

4.57 

100.8 

100.7 

3.33 

3.67 

3.88 

4.03 

4.26 

4.38 

4.45 

4.50 

4.53 

4.56 

4.58 

4.59 

100.7 

100.6 

2.92 

3.53 

3.82 

4.00 

4.13 

4.33 

4.43 

4.49 

4.53 

4.56 

4.58 

4.60 

4.61 

100.6 

100.5 

3.22 

3.73 

3.97 

4.13 

4.23 

4.40 

4.49 

4.54 

4.57 

4.59 

4.61 

4.63 

4.64 

100.5 

100.4 

3.52 

3.93 

4.13 

4.25 

4.34 

4.47 

4.54 

4.58 

4.61 

4.63 

4.64 

4.65 

4.66 

100.4 

100.3 

2.91 

3.82 

4.14 

4.28 

4.37 

4.44 

4.54 

4.59 

4.62 

4.64 

4.66 

4.67 

4.68 

4.68 

100.3 

100.2 

2.31 

3.51 

4.12 

4.34 

4.43 

4.50 

4.54 

4.61 

4.64 

4.66 

4.68 

4.69 

4.69 

4.70 

4.70 

100.2 

100.1 

3.50 

4.11 

4.43 

4.55 

4.59 

4.62 

4.65 

4.68 

4.70 

4.71 

4.71 

4.72 

4.72 

4.73 

4.73 

100.1 

100  0 

4.70 

4.71 

4.73 

4.75 

4.74 

4.74 

4.75 

4.75 

4.75 

4.75|4.75 

4.75 

4.75 

4.75 

4.75 

100.0 

123 


Index 


Adams,  John:  Concludes  treaty  of  peace 
with  France — 1800,  10 

Bank  notes:  Depreciation  of,  enhances 
cost  of  War  of  1812, 16 

Bank  of  the  United  States,  First:  Pro- 
posed by  Hamilton,  6;  Congress  fails  to 
renew  charter,  16;  Loans  to  Govern- 
ment, 7 

Bank  of  the  United  States,  Second:  Be- 
gins business  1817,  20;  Jackson's  oppo- 
sition to,  24:  United  States  takes  $7,- 
000,000  of  stock,  21 

Banks  and  United  States  bonds,  83;  Cir- 
culation, 83;  Public  deposits,  85;  Loans, 


Barbary  powers:  Tribute  paid  to,  9; 
Purchase  of  vessels  to  protect  commerce, 
7;  War  with,  11 

Bond  values  tables.  107 

Budget,  First  national,  nearly  all  for  debt, 
6 

Certificates  of  Indebtedness,  use  in  Great 
War,  57,  58,  70,  75.  85,  87 

Circulation:  Federal  reserve  bank  notes, 
83;  Under  Pittman  Act,  84;  National 
bank  notes,  83 

Civil  War:  Banking  conditions  unsatis- 
factory, 35;  Cost,  38;  Currency,  demor- 
alized status,  excuse  for  issue  of  legal 
tender  notes,  35;  Financing— Secretary 
Chase's  policy  like  Gallatin's  in  1812,  34; 
Industrial  expansion  during  and  follow- 
ing, 41;  Interest  rates  on  debt  at  gold 
value?,  39;  (1869-1878).  42;  Liquidat- 
ing the  war  debt,  40-45;  Maximum  debt 
for,  37;  Rapid  decrease  in  debt  follow- 
ing, 42,  43;  Tax  policy  and  receipts,  34, 
38,  42;  The  national  banks,  36;  The  two 
great  war  loans,  37;  United  States  notes 
(legal  tenders  or  "Greenbacks"),  35,  39 

Confederation,  debt  of,  1 

Coupon  bonds,  92 

Credit,  Public  defined  by  Hamilton,  5 

Crisis,  Financial — First  in  1792,  6;  of 
1819,21;  1837.25;  1857.27,32 

Cunency  crisis,  1894-1897,  46-52,  106; 
expansion,  1812,  16;  1862-1865,  40;  and 
politics,  46 


Debt — See  Public  Debt 

Deficits:  An  empty  treasury  in  1837,  27; 
1820  and  1821  met  by  bond  sales,  21; 
Deficit  financing — 1837-1861,  26-33 

Denominations  ot  all  bond  issues,  102 

District  of  Columbia :  The  pi  ice  of  South- 
ern States  cooperation  in  Hamilton's 
policy  funding  State  debts,  3 

Embargoes  and  non-Intercourse  with  Eng- 
land and  France,  12 

England — See  Great  Britain 

Federalist  government:  Ended  1801,  8; 
Financial  problems,  9 

Federal  Reserve  Banks:  Circulation,  84; 
Importance  of  aid  in  financing  Great 
War,  56;  Loans  to  member  banks  on  U. 
S.  bond  collateial,  86 

Florida:  Purchased  from  Spain  in  1824 
for  55,000,000,  22 

Foreign  governments:  Debts  compared 
with  that  of  U.  S.,  65;  Loans  to  in  Great 
War,  59,  62 

Foreign  trade:  Disorganized  1805  to 
1812,  12 

France:  ' Controversies  with,  7,  10,  12,  14; 
Debt  and  wealth,  1919,  67;  Interest 
charge  and  income,  66,  67,  68;  Loan  on 
account  possible  war,  7;  Our  debt  to,  9; 
Re-acquires  Louisiana  from  Spain,  11; 
Seizes  our  ships,  13;  Treaty  of  peace 
with  in  1800,  10,  11;  Value  of  vessels 
seized  by,  13 

Gallatin,  Albert:  Financier  of  Jefferson's 
administration,  8;  Results  of  adminis- 
tration of  Treasury  foi  ten  years,  15;  Sec- 
retary of  Treasury,  8;  Theory  of  war 
financing,  14;  Views  in  regard  to  effect 
of  war  with  France  or  England,  15 

Germany:  Debt  and  wealth,  1919.  66, 
67;  Interest  charge  and  income,  66,  67; 

Great  Britain:  Controversies  with,  9; 
Debt  and  wealth,  1919,  66,  67,  68;  Inter- 
est charge  and  income,  66,  67,  68;  Jay's 
treaty  with,  10;  Strained  relations  1805 
to  1812,  12;  War  declared  with,  1812,  13 

Greenbacks— See  United  States  notes 

Gold  reserve:  Authority  to  maintain,  43, 
44,  52;  History  of,  43,  44;  Sale  01  bonds 
to  create  in  1878,  43;   To  maintain,  50 


124 


INDEX 


[  125 


Hamilton,  Alexander:  First  Secretary  of 
Treasury,  1;  For  twelve  years  guided 
policy  of  treasury,  8;  Mint  and  coin- 
age, formulated  plans  for,  6;  Report  on 
manufactures,  4;  Report  on  public 
credit,  1 ;  Second  report  on  public  credit, 
4;  Sequestration  of  debt,  opposed  to,  6; 
Taxing  debt,  opposed  to,  5 

Income  tax,  36 

Income,  National:  Compared  with  in- 
terest charge,  64;  Compared  with  that 
of  Foreign  Nations,  65,  67 

Independent  treasury  inaugurated  in 
1846,  31;  merits,  31;  dangers,  31,  32 

Italy:  Debt  and  wealth,  1919,  66,  67,  68; 
Interest  charge  and  income,  66,  67,  68 

Jay's  treaty,  10 

Jefferson,  Thomas:  Debt  payment  his 
policy,  10;  Excise  duties  repealed,  10 

Legal-tender  notes  —  See  also  United 
States  notes ;  Arg  ument  for  by  Secretary 
Spencer  in  1843,  28-30;  Use  of  Treasury 
notes  in  1812-17  nearly  developed  into, 


Liberty  Bond3 — See  Public  Debt 

Louisiana:  Bond  issue  to  pay  France,  12, 
15;  Purchased  from  France  in  1804  for 
$14,000,000,  12;  Spain  retrocedes  to 
France,  n 

Market  prices  of  bonds,  trend  after  criti- 
cal periods,  always  upward,  60,  105 

Mediterranean  fund,  11 

Mexican  War,  1846-1848,  26;  cost  31; 
How  financed,  31 

Mississippi  stock,  19 

Napoleon,  ambitions,  12;  need  of  funds, 
12;  Treaty  of  peace  with,  in  1800,  10 

National  Banking  System:  A  Civil  War 
measure,  36,  47;  Circulation:  Bond  is- 
sues available  for,  71,  83;  high  bond 
prices  induce  retirement,  48;  profitable, 
85;  Conversion  of  2s,  55,  72,  84 

Navy  Department  organized  April  30, 
1798,  10 

Non-intercourse  act  complications,  12 

Pacific  railroads  subsidy  bonds,  41 

Panama  Canal  financing,  54 

Pittman  Act,  certificates  issued  under  se- 
cure Federal  Reserve  Bank  Notes,  84 

Postal-Savings  Bonds,  55,  73 

Postal-Savings  deposits,  73 


Public  Credit,  adequate  tax  policy  neces- 
sary to  maintain:  Hamilton's  course, 
6;  Gallatin's  mistake  corrected  by  un- 
expected customs  receipts,  17;  effective 
toward  close  and  after  Civil  War,  38;  ad- 
equate Spanish  War,  53;  satisfactory 
Great  War,  57;  Defined  by  Hamilton,  5 

Public  Credit  Act,  41 ;  Second  Credit  Act, 

52 

Public  Debt:  Amount,  1789.  i,9;i795.  4; 
1 81 2,  15;  1815,  Dec.  31,  maximum  prior  to 
CivilWar,  19;  all  paid,  183s,  23;amount 
1851,  32;  1865,  37;  1017.  55;  1919.  59, 
62,  101;  Bond  issues  to  secure  and  main- 
tain currency  parities,  43,  49,  50; Cer- 
tificates of  indebtedness,  57,  70,  75,  87; 
Circulation  bonds,  55,  71;  Civil  war  is- 
sues, 37,  106;  Comparative  statement 
for  critical  periods,  63;  with  other  na- 
tions, 65;  Conversion  bonds,  55,  72,  84; 
Conversion  privileges,  76,  77,  78,  104; 
Confiscation,  time  of  war,  Hamilton  op- 
posed to,  6;  Coupon  bonds,  92;  Denom- 
inations, 102;  Deficits  covered  by  bond 
sales,  1820-1821,  21;  Domestic,  1789,  1, 
3;  Enemy  holdings,  sequestration  against 
public  interest,  6;  Foreign,  1789,  r,  3; 
Gold  coin,  bonds  payable  in,  69;  Gold 
reserve,  sale  of  bonds  to  create  and  main- 
tain, 43,  44;  Interest  charge  and  national 
income,  64;  Interest  rates:  During  Civil 
War,  39;  following  Civil  War,  42; 
on  various  issues,  100;  Liberty 
Bonds,  59,  76,  87;  Louisiana  stock,  12, 
15;  Lost,  destroyed  and  defaced  bonds, 
99;  Market,  method  of  dealing,  69;  Mar- 
ket purchases,  1 791-1792,  6;  Market 
values:  1789-1811,  6,  105;  1812-1818, 
17,  105;  1843-1850, 105;  1860-1880,  43, 
6o,  106;  i894-'97,  106;  1898,  106. 
Mississippi  stock,  19;  Old  debt:  defined, 
69;  described,  71;  outstanding,  100; 
Origin  of  debt,  1;  Panama  Canal 
financing,  54;  Per  capita  debt,  63;  in- 
terest charge,  64;  Postal-Savings  bonds, 
55,  73;  Prices — See  market;  Reduction, 
rapidly  as  possible  traditional  policy,  4, 
59,  60;  Reductions,  1816-1835,  20  to  25; 
1853-1856, 32;  rapid,  1865-1893,  40-45; 
Refunding  operations,  1877-1881  43,  44; 
1900,  53,  54;  Twos,  53,  72;  Registered 
bonds,  assignments,  interest,  how  to  col- 
lect, 94;  Revenue  system,  standing  of 
debt  dependent  upon  proper,  6;  Revolu- 
tionary, how  funded,  3;  Resumption 
specie  payments,  bonds  sold  for,  43; 
Sinking  fund,  4,  21,  63;  Spanish  War 
financing,  53;  Speculation  in,  1792,  6; 
State  debts,  assumed,  1,  3;  Taxation  of; 
Hamilton  opposed  to,  5;  Liberty  bonds 
and  notes,  87;  Certificates,  87;  State  tax- 
ation, 91;  Thrift  cards  and  stamps,  59,  82; 
Transfer  books,  open  and  close,  98,  102 ; 


126 


BANKERS  TRUST  COMPANY 


Treasury  notes,  1812-1816,  18,  19; 
1837-1860,  27,  33; — Two's-Conversion 
privilege,  55,  72,  84;  United  States  notes, 
35,  72;  Victory  Liberty  Notes,  79,  90 ; 
War  debt:  defined,  69;  described,  75; 
how  taxed,  87;  outstanding,  101;  War 
Savings  Certificates,  59,  70,  80,  87 

Revenue:  Customs,  17,  20,  22  23,24,46; 
Excise  taxes,  10;  Income  taxes,  56; 
Land  sales,  10,  24,  38 

Silver  craze,  1878-1897:  46-52  Silver  legis- 
lation ,47,48;  The  depreciated  silver  coin- 
age driving  the  gold  out.  President 
Cleveland's  determined  effort  to  main- 
tain the  paiity,  1894-1897,  49-52 

Spain:  Retrocedes  Louisiana  to  France, 
1 1 ;  Right  of  deposit  at  New  Orleans,  1 1 ; 
United  States  purchases  Florida  in  1824, 
22;  War  with,  1898,  how  financed,  53 

Specie     payments:    Suspended     August, 
1814,  16;  1837,  25;  1861,  35;  Resumed, 
1879,42,43,  47 
States:    Debts  of  assumed,  2,  3 
Stoddert,  Benjamin:    First    Secretary    of 
Navy,  10 

Surplus:  Distribution  to  the  States,  in 
1 8, 37,  24, 25;  Financing,  1816-1836,20  to 
25;  Revenues,  1865-1893,  40  to  45,  48; 
Prevent  depletion  of  gold  reserve,  49; 
from  1899-1905,  53',  Secretary  McLean 
discusses  disposition  to  be  made  of,  22; 
Purchase  of  bonds  in  order  to  unlock 
Treasury  accumulations,  1851-1857.  3TI 
p.  and  redemption  of  bonds  to  absorb 
surpluses,  1865-1892,  40-45,  53 

Taxation:  Federalist  policy,  10;  Galla- 
tin's policy,  14,  15;  inheritance  taxes,  90; 
of  public  debt,  5.  87,91 ;  for  great  war  60, 


Temporary  loans:  Use  in  financing  War 
of  1 81 2,  19;  in  Civil  War,  37;  in  Great 
War,  58 

Thrift  stamps,  82 

Transfer  books,  close  and  open,  98,  102 

Treasury  notes — See  Public  Debt 

United  States:  Debt  and  wealth,  1919, 
66,  67,  68;  Interest  charge  and  income 
66,  67.  68 

United  States  Notes:  Civil  War  issues, 
35,  36,  72;  Extent  of  depreciation  during 
and  after  Civil  War,  39,  42;  How  justi- 
fied in  1862,  35,  36,  47.  See  also  Legal- 
tender  notes. 

War  of  1812,  14  to  19;  Cost  of,  17;  Pei 
cent,  paid  from  taxation,  17;  doubled 
because  of  depreciation  of  bank  notes, 
16;  Financed  by  Treasury  Notes,  bonds, 
temporary  loans,  taxation,  17;  Increase 
in  debt  because  of,  17;  Loans  issued,  17; 
Taxation  for,  Gallatin  opposed  to,  14, 16; 
Congress  opposed  to,  16 

War:  The  Great  War,  1914  (U.  S.  1917). 
56-61;  Cost,  57;  Per  cent,  raised  from 
taxes  and  per  cent,  from  debt,  57; 
How  financed,  56-59;  Loans  to  foreign 
governments,  59,  62;  Securities  issued, 
57-59.  75-82;  Statement  of  debt  in  detail, 
105;  Amount  being  carried  by  banks,  86 

War  Savings  Certificates,  59.  70,  80,  87 

Washington:  Counsels  definite  plan  for  re- 
duction of  debt,  4 

Wealth,  National,  U.  S.  A.  and  debt,  63; 
and  foreign  compared,  65,  67 


BANKERS  TRUST  COMPANY'S 
PUBLICATIONS 

OUR  PUBLIC  DEBT  "  is  the  first  book  in  a  series  of 
important  publications  which  the  Company  purposes 
issuing  from  time  to  time  for  the  information  of  its  clients. 
The  Company  now  has  in  preparation  for  early  issue  an  ex- 
haustive study  of  the  railroad  situation.  This  will  be  fol- 
lowed by  historical  and  analytical  studies  of  the  public  debts 
and  resources  of  the  principal  European  nations.  Announce- 
ments in  regard  to  other  publications  will  be  made  later. 
The  following  publications  now  in  print  or  soon  to  be  issued 
may  be  had  upon  request: 

TWENTY-FOUR  BILLION— Issued  in  1918 

The  aim  of  this  pamphlet  is  to  determine  a  fair  distri- 
bution of  the  war  burden  among  the  20,000,000 
families  of  the  nation. 

THE  WAR  FINANCE  BILL  OF  1919 

Carefully  annotated  for  the  convenience  of  taxpayers. 

OUR  PUBLIC  DEBT 

A  history  and  description. 

LIBERTY  BOND  VALUE  TABLES 

These  tables  give  income  yields  for  Liberty  bonds  at 
3>£%,  4%  and  4^%  and  for  Notes  and  Certificates  at 
3K%,  4^%  and  4^%- 

THE  VICTORY  LIBERTY  LOAN  ACT 

An  annotated  edition,  with  the  other  Acts  of  Congress 
regarding  the  outstanding  public  debt. 


TO  THE  READER 

When  you  become  a  customer  of  our  Bond  Department  you 
will  have  the  investment  experience  of  the  Bankers  Trust 
Company  at  your  service.  Our  officers  will  be  glad  to  review 
your  lists  of  investments  and  advise  you  in  regard  thereto — 
that  they  may  be  suited  to  your  needs  and  sufficiently  di- 
versified. Because  it  is  our  policy  to  offer  to  our  customers 
only  such  securities  as  we  are  willing  to  include  in  our  own 
investments,  you  will  find  in  our  current  offerings — sent  to 
you  on  request — a  carefully-selected  list  of  securities  which 
we  are  buying  for  our  own  account. 

We  are  equipped  to  render  complete  banking  service  to  busi- 
ness men  and  concerns,  large  and  small.  We  act  as  depositary 
for  inactive  and  reserve  funds,  as  well  as  for  commercial  ac- 
counts. Our  service  also  includes  facilities  for  handling  trade 
acceptances  and  foreign  and  domestic  exchange.  Through 
our  membership  in  the  Federal  Reserve  System  our  customers 
are  afforded  all  of  the  advantages  of  the  best  commercial 
banks,  while  they  have  the  additional  advantages  of  complete 
trust  company  service  in  personal  and  corporate  trusteeships 
and  agency  relations. 

Downtown  Office  Astor  Trust  Office 

16  Wall  Street  Fifth  Avenue  at  42ND  Street 

Bankers  Trust  Company 
New  York 


■■ 


UNIVERSITY  OF  CALIFORNIA  AT  LOS  ANGELES 

THE  UNIVERSITY  LIBRARY 
This  book  is  DUE  on  the  last  date  stamped  below 


JVH 


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1  lm 


fcCD  LO-fjRt 


Form  L-9-15m-2,'36 


LOS  At 
LIBRARY 


University  ol  California  Los  Angeles 


L  005  794  567  7 


UC  SOUTHERN  REGIONAL  LIBRARY  FACILITY 


AA    001  146  303    1 


